HOTMA CHANGES IN THE ADMINSTRATIVE PLAN

On July 29, 2016, the Housing Opportunity Through Modernization Act of 2016 (HOTMA) was signed into law. HOTMA made numerous changes to statutes governing HUD programs, including sections of the United States Housing Act of 1937. Title I of HOTMA contains 14 different sections that impact the public housing and Section 8 programs.

HOTMA 102/104 HUD published a final rule on February 14, 2023, revising regulations related to income, assets, adjusted income, verification, and reexams (among others) to implement Sections 102 and 104 of HOTMA. While the new regulations were effective January 1, 2024, HUD has delayed the compliance date for HOTMA 102/104. Initially, HUD published a delayed compliance date of January 1, 2025, but HUD again delayed the compliance date for HOTMA 102/104 and no new date has been provided. Compliance with Sections 102 and 104 of HOTMA means not only applying HOTMA 102/104 regulations to affected programs but also reporting in HUD's new Housing Information Portal (HIP) system. Currently, PHAs remain unable to comply with HOTMA 102/104 because compliance depends on transitioning from HUD's IMS/PIC system (which is unable to accept HOTMA-compliant Form HUD-50058) to HUD's new HIP system (which will be the only system that accepts HOTMA-compliant Form HUD-50058). PHAs cannot transition to HOTMA until HIP is in place, HOTMA-compliant, and accessible. However, HUD has determined that a few HOTMA 102/104 policies are not dependent on transition systems and easily isolated from other HOTMA 102/104 policy changes. These policies may be implemented prior to the migration to HIP. HUD stated that PHAs may update their policy documents before determining the date at which they will transition to all HOTMA Section 102 and 104 policies. HUD stated that in order to update their policy documents for HOTMA in this circumstance, PHAs may create an appendix that contains the HOTMA policies that will be incorporated at a later date. The model policy adopts such an approach. HOTMA 102/104 policies are provided in each affected area of the model policy. However, with the exception of the policies HUD has indicated may be adopted early, HOTMA policies that are "on hold" are indicated in the model policy as such. Further, an appendix has been provided to explicitly call out those policies that are on hold.

HOTMA VOUCHER FINAL RULE The final rule implementing streamlining changes to the HCV and PBV programs was published on May 7, 2024, and codified certain provisions in Sections 101, 105, 106, and 112 of HOTMA, as well as incorporating changes from the NSPIRE final rule discussed above. The rule is known as the "HOTMA voucher final rule." The effective date of the HOTMA voucher final rule was June 6, 2024. While the compliance date for certain provisions of the rule is the same as the effective date, the compliance date for other provisions is not until 90 days, 180 days, or one year after the effective date. Further, many new changes to the regulations described in the HOTMA voucher final rule require changes to the PHA's administrative plan. PHAs must make all revisions needed to bring existing policies into compliance with the final rule no later than June 6, 2025 (one year after the effective date). However, if a PHA wishes to use program flexibilities requiring adoption of new local policies not already present in the PHA's administrative plan, the PHA must add those policies to the administrative plan prior to using those program flexibilities. Further, the delayed compliance date for policies of June 6, 2025, does not authorize delayed compliance with the provisions of the rule. PHAs that choose not to bring their policies into compliance with the rule until June 6, 2025, must still implement each provision on its compliance date. In order to identify those provisions of the final rule that are not effective until after June 6, 2024, the model policy states that certain policies are not effective until a specific date.

About The Administrative Plan

REFERENCES CITED IN THE ADMINISTRATIVE PLAN The authority for PHA policies is derived from many sources. Primary among these sources are federal statutes, federal regulations, and guidance issued by HUD. State law also directs PHA policy. State law must be followed where such law exists and does not conflict with federal regulations. Industry practice may also be used to develop policy as long as it does not conflict with federal requirements or prohibitions.

HUD HUD provides the primary source of PHA policy through federal regulations, HUD notices, and handbooks. Compliance with federal regulations, current HUD notices, and current HUD handbooks is mandatory. HUD also provides guidance to PHAs through other means such as HUD-published guidebooks, expired HUD notices, and expired handbooks. Basing PHA policy on HUD guidance is optional, as long as PHA policies comply with federal law, federal regulations and mandatory policy. Because HUD has already determined that the guidance it provides is consistent with mandatory policies, PHA reliance on HUD guidance provides the PHA with a "safe harbor." Material posted on the HUD website can provide further clarification of HUD policies. For example, FAQs on the HUD website can provide direction on the application of federal regulations in various aspects of the program. State Law Where there is no mandatory federal guidance, PHAs must comply with state law, if it exists. Where state law is more restrictive than federal law, but does not conflict with it, the PHA should follow the state law. Industry Practice Where no law or HUD authority exists on a particular subject, industry practice may support PHA policy. Industry practice refers to a way of doing things or a policy that has been adopted by a majority of PHAs.

NSPIRE AND HQS IN THE ADMINISTRATIVE PLAN The PHA must determine that the rental unit selected by the family is in safe and habitable condition at certain times prescribed by the regulations. The current applicable inspection standard for the HCV and PBV programs is Housing Quality Standards (HQS). On May 11, 2023, HUD published a final rule implementing the National Standards for the Physical Inspection of Real Estate (NSPIRE final rule), a new approach to defining and assessing housing quality across multiple HUD programs. 24 CFR 5.703 describes the NSPIRE standards, including variations for the HCV and PBV programs. Notice PIH 2023-28 finalized the administrative procedures for NSPIRE as they pertain specifically to the HCV and PBV programs. Collectively, this is known as "NSPIRE-V."

The compliance date for NSPIRE-V is no later than October 1, 2025, at which point the HQS inspection standard will sunset. PHAs may, however, implement NSPIRE-V prior to October 1, 2025, provided they do so in accordance with requirements in FR Notice 7/5/24. However, even once the HQS inspection standard has sunset, the regulations at 24 CFR Part 982 and 983 governing the HCV and PBV programs will continue to use the terms HQS and housing quality standards rather than NSPIRE. This is because, the definition of housing quality standards (HQS) at 24 CFR 982.4 means the minimum quality standards developed by HUD in accordance with 24 CFR 5.703 for the HCV program, including any variations approved by HUD for the PHA. As such, the model policy uses the term housing quality standards whenever applicable regulations use this term. Except in the chapter describing HQS, the acronym HQS is not used in the model policy in order to avoid confusion between the umbrella term meaning housing standards and the specific inspection protocol. The model policy only uses the term NSPIRE when referring to specific NSPIRE standards.

Hotma Sections 102 And 104 Changes In The Model Policy

On July 29, 2016, the Housing Opportunity Through Modernization Act of 2016 (HOTMA) was signed into law. HOTMA made numerous changes to statutes governing HUD programs, including sections of the United States Housing Act of 1937. Title I of HOTMA contains 14 different sections that impact the public housing and Section 8 programs. HUD published a final rule on February 14, 2023, revising regulations related to income and assets (Sections 102 and 104 of HOTMA). While the new income and asset regulations were effective January 1, 2024, PHAs were instructed to select a compliance date no later than January 1, 2025. Compliance with Sections 102 and 104 of HOTMA means not only applying HOTMA regulations to affected programs but also reporting in HUD's new Housing Information Portal (HIP) system. Currently, PHAs remain unable to select a compliance date because HOTMA compliance depends on transitioning from HUD's IMS/PIC system (which is unable to accept HOTMA-compliant Form HUD-50058) to HUD's new HIP system (which will be the only system that accepts HOTMA- compliant Form HUD-50058). Because HOTMA-compliant reexaminations cannot be successfully submitted to IMS/PIC, HUD advised PHAs not to begin conducting reexaminations under HOTMA rules without further information on when the new HOTMA-compliant Form HUD-50058 in HIP will be available. PHAs cannot transition to HOTMA until HIP is in place, HOTMA-compliant, and accessible.

HOTMA VOUCHER FINAL RULE CHANGES IN THE MODEL POLICY The final rule implementing streamlining changes to the HCV and PBV programs was published on May 7, 2024, and codified certain provisions in Sections 101, 105, 106, and 112 of HOTMA, as well as incorporating changes from the NSPIRE final rule discussed above. The rule is known as the "HOTMA voucher final rule." The effective date of the HOTMA voucher final rule was June 6, 2024. While the compliance date for certain provisions of the rule is the same as the effective date, the compliance date for other provisions is not until 90 days, 180 days, or one year after the effective date. Further, many new changes to the regulations described in the HOTMA voucher final rule require changes to the PHA's administrative plan. PHAs must make all revisions needed to bring existing policies into compliance with the final rule no later than June 6, 2025 (one year after the effective date). However, if a PHA wishes to use program flexibilities requiring adoption of new local policies not already present in the PHA's administrative plan, the PHA must add those policies to the administrative plan prior to using those program flexibilities. Further, the delayed compliance date for policies of June 6, 2025, does not authorize delayed compliance with the provisions of the rule. PHAs that choose not to bring their policies into compliance with the rule until June 6, 2025, must still implement each provision on its compliance date. In order to identify those provisions of the final rule that are not effective until after June 6, 2024, the model policy states that certain policies are not effective until a specific date.

RESOURCES CITED IN THE ADMINISTRATIVE PLAN The administrative plan cites several documents. Where a document or resource is cited frequently, it may be abbreviated. Where it is cited only once or twice, the administrative plan may contain the entire name of the document or resource. Following is a key to abbreviations used for various sources that are frequently cited in the administrative plan and a list of references and document locations that are referenced in the administrative plan or that may be helpful to you.

HUD HCV Guidebook In November 2019 HUD began issuing a new version of the HCV Guidebook chapter-by- chapter. Unlike the previous version of the HCV Guidebook in which chapters were numbered, the new version of the guidebook includes chapter names, but no numbers. As the new version of the guidebook has not yet been fully released, and since the previous version of the guidebook contains guidance not found in the new version, the policy cites both versions of the guidebook. Therefore, where the HCV Guidebook is cited in the policy, the citation will make a distinction between the "old" and "new" versions of the guidebook. The "old" version of the guidebook will continue to be cited as HCV GB with a chapter/page reference (example: HCV GB, p. 5-4). If HUD has also released a new chapter on the same topic with information that either adds new information or updates existing information from the previous guidebook, the new guidebook will be cited as New HCV GB with a chapter title and page reference (example: New HCV GB, Payment Standards, p. 11). On September 29, 2023, HUD issued Notice PIH 2023-27 to implement sections 102 and 104 of the Housing Opportunity Through Modernization Act of 2016 (HOTMA). The notice supersedes relevant portions of the guidebook, specifically the chapters on eligibility, denials, and annual reexaminations and interim reexaminations. Where chapters have not been altered by the HOTMA implementation notice, the model policy continues to cite the HCV Guidebook.

Abbreviations

Throughout the administrative plan, abbreviations are used to designate certain documents in citations. The following is a table of abbreviations of documents cited in the administrative plan.

Resources and Where to Find Them

The HUD website is https://www.hud.gov/. Guidebooks, handbooks, and other HUD resources may be found at the HUDClips website: https://www.hud.gov/program_offices/administration/hudclips.

Following is a list of resources helpful to the PHA or referenced in the administrative plan, and the online location of each.

Document and Location Code of Federal Regulations https://www.ecfr.gov/ Final Rule http://edocket.access.gpo.gov/2008/pdf/E8-19435.pdf Enterprise Income Verification (EIV) System, Security Procedures for Upfront Income https://www.hud.gov/sites/documents/EIVSECGUIDEPHA.PDF Executive Order 11063 https://www.archives.gov/federal-register/codification/executive-order/11063.html Federal Register https://www.federalregister.gov/ Housing Choice Voucher Program Guidebook (7420.10G), Updated Chapters https://www.hud.gov/program_offices/public_indian_housing/programs/hcv/guidebook HOTMA Final Rule https://www.federalregister.gov/documents/2023/02/14/2023-01617/housing-opportunity- through-modernization-act-of-2016-implementation-of-sections-102-103-and- 104?utm_campaign=subscription+mailing+list&utm_source=federalregister.gov&utm_medium= email HOTMA Implementation Notice, PIH 2023-27 https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-27pihn.pdf Joint Statement of the Department of Housing and Urban Development and the Department of Justice, issued May 17, 2004 https://www.justice.gov/sites/default/files/crt/legacy/2010/12/14/joint_statement_ra.pdf Final Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons, published January 22, 2007 https://www.lep.gov/guidance/HUD_guidance_Jan07.pdf Notice PIH 2010-26 (HA), Nondiscrimination and Accessibility Notice https://www.hud.gov/sites/documents/DOC_8993.PDF Notice PIH 2017-12, Administrative Guidance for Effective and Mandated Use of the Enterprise Income Verification (EIV) System https://www.hud.gov/sites/documents/PIH2017-12EIVNOTICE.PDF VAWA Resources https://www.hud.gov/vawa

OVERVIEW OF THE PROGRAM AND PLAN

INTRODUCTION The PHA receives its funding for the Housing Choice Voucher (HCV) program from the Department of Housing and Urban Development. The PHA is not a federal department or agency. A public housing agency (PHA) is a governmental or public body, created and authorized by state law to develop and operate housing and housing programs for low-income families. The PHA enters into an Annual Contributions Contract (ACC) with HUD to administer the program requirements on behalf of HUD. The PHA must ensure compliance with federal laws, regulations and notices and must establish policy and procedures to clarify federal requirements and to ensure consistency in program operation. This chapter contains information about the Housing Authority of the County of Merced (Authority) and its programs with emphasis on the HCV program. It also contains information about the purpose, intent and use of the plan and guide. There are three parts to this chapter: Part I: The Public Housing Agency (PHA). This part includes a description of the Authority, its jurisdiction, its programs, and its mission and intent. Part II: The HCV Program. This part contains information about the Housing Choice Voucher program operation, roles and responsibilities, and partnerships. Part III: The HCV Administrative Plan. This part discusses the purpose and organization of the plan and its revision requirements.

Part I: The Pha

1-I.A. OVERVIEW

This part explains the origin of the PHA's creation and authorization, the general structure of the organization, and the relationship between the PHA Board and staff.

1-I.B. ORGANIZATION AND STRUCTURE OF THE PHA

The Section 8 tenant-based Housing Choice Voucher (HCV) assistance program is funded by the federal government and administered by the Housing Authority of the County of Merced (Authority) for the jurisdiction of Merced County. The officials of a PHA are known as commissioners or, collectively, as the board of commissioners. Commissioners are appointed in accordance with state housing law and generally serve in the same capacity as the directors of a corporation, establishing policies under which the PHA conducts business, ensuring that policies are followed by PHA staff and ensuring that the PHA is successful in its mission. The board is responsible for preserving and expanding the agency's resources and assuring the agency's continued viability. Formal actions of the PHA are taken through written resolutions, adopted by the board of commissioners and entered into the official records of the PHA. The principal staff member of the PHA is the executive director (ED), hired and appointed by the board of commissioners. The executive director is directly responsible for carrying out the policies established by the board and is delegated the responsibility for hiring, training and supervising the PHA staff in order to manage the day-to-day operations of the PHA. The executive director is responsible for ensuring compliance with federal and state laws and directives for the programs managed. In addition, the executive director's duties include budgeting and financial planning for the agency.

1-I.C. PHA MISSION

The purpose of a mission statement is to communicate the purpose of the agency to people inside and outside of the agency. It provides guiding direction for developing strategy, defining critical success factors, searching out key opportunities, making resource allocation choices, satisfying clients and stakeholders, and making decisions. Mission The Housing Authority of the County of Merced offers affordable housing opportunities to our community by providing access to a variety of services and programs to promote self-sufficiency and to enhance the quality of life for those we serve. We strive to provide housing assistance, training, education, and homeownership opportunities by participation in the acquisition, development and operation of affordable housing through the utilization of various funding sources and partnerships that builds pride and responsibility in our residents. We are committed to giving our clients and each other courtesy, respect and quality customer care. We will ethically apply the laws, rules and regulations that govern this Agency, and further affirm the value and dignity of each person we serve and with whom we work.

1-I.D. THE PHA'S PROGRAMS

The following programs are included under this administrative plan:

1-I.E. THE PHA'S COMMITMENT TO ETHICS AND SERVICE

As a public service agency, the PHA is committed to providing excellent service to HCV program participants, owners, and to the community. The Authority's standards include:

• Administer applicable federal and state laws and regulations to achieve high ratings in

performance measurement indicators while maintaining efficiency in program operation to ensure fair and consistent treatment of clients served.

• Provide decent, safe, and sanitary housing – in compliance with program housing quality

standards – for very low income families while ensuring that family rents are fair, reasonable, and affordable.

• Encourage self sufficiency of participant families and assist in the expansion of family

opportunities which address educational, socio-economic, recreational and other human services needs.

• Promote fair housing and the equal opportunity for very low-income families of all ethnic

backgrounds to experience freedom of housing choice.

• Promote a housing program which maintains quality service and integrity while providing an

incentive to private property owners to rent to very low-income families.

• Promote a market-driven housing program that will help qualified low-income families be

successful in obtaining affordable housing and increase the supply of housing choices for such families.

• Create positive public awareness and expand the level of family, owner, and community

support in accomplishing the Authority's mission.

• Attain and maintain a high level of standards and professionalism in day-to-day management

of all program components.

• Administer an efficient, high-performing agency through continuous improvement of the

Authority's support systems and a high level of commitment to our employees and their development. The Authority will make every effort to keep program participants informed of HCV program rules and regulations, and to advise participants of how the program rules affect them.

Part Ii: The Housing Choice Voucher (Hcv) Program

1-II.A. OVERVIEW AND HISTORY OF THE PROGRAM

The intent of this section is to provide the public and staff with information related to the overall operation of the program. There have been many changes to the program since its inception in 1974 and a brief history of the program will assist the reader to better understand the program. The United States Housing Act of 1937 (the "Act") is responsible for the birth of federal housing program initiatives. The Act was intended to provide financial assistance to states and cities for public works projects, slum clearance and the development of affordable housing developments for low-income residents. The Housing and Community Development (HCD) Act of 1974 created a new federally assisted housing program – the Section 8 Existing program (also known as the Section 8 Certificate program). The HCD Act represented a significant shift in federal housing strategy from locally owned public housing to privately owned rental housing. Under the Certificate program, federal housing assistance payments were made directly to private owners of rental housing, where this housing was made available to lower-income families. Eligible families were able to select housing in the private rental market. Assuming that the housing met certain basic physical standards of quality ("housing quality standards") and was within certain HUD-established rent limitations ("fair market rents"), the family would be able to receive rental assistance in the housing unit. Family contribution to rent was generally set at 30 percent of the family's adjusted income, with the remainder of the rent paid by the program. Another unique feature of the Certificate program was that the rental assistance remained with the eligible family, if the family chose to move to another privately-owned rental unit that met program requirements (in contrast to the public housing program where the rental assistance remains with the unit, should the family decide to move). Consequently, the Certificate program was characterized as tenant-based assistance, rather than unit-based assistance. The Housing and Community Development (HCD) Act of 1987 authorized a new version of tenant-based assistance – the Section 8 Voucher program. The Voucher program was very similar to the Certificate program in that eligible families were able to select housing in the private rental market and receive assistance in that housing unit. However, the Voucher program permitted families more options in housing selection. Rental housing still had to meet the basic housing quality standards, but there was no fair market rent limitation on rent. In addition, family contribution to rent was not set at a limit of 30 percent of adjusted income. Consequently, depending on the actual rental cost of the unit selected, a family might pay more or less than 30 percent of their adjusted income for rent.

From 1987 through 1999, public housing agencies managed both the Certificate and Voucher tenant-based assistance programs, with separate rules and requirements for each. From 1994 through 1998, HUD published a series of new rules, known as "conforming" rules, to more closely combine and align the two similar housing programs, to the extent permitted by the law. In 1998, the Quality Housing and Work Responsibility Act (QHWRA) – also known as the Public Housing Reform Act – was signed into law. QHWRA eliminated all statutory differences between the Certificate and Voucher tenant-based programs and required that the two programs be merged into a single tenant-based assistance program, now known as the Housing Choice Voucher (HCV) program. The HCV program was modeled closely on the pre-merger Voucher program. However, unlike the pre-merger Voucher program, the HCV program requires an assisted family to pay at least 30 percent of adjusted income for rent. The transition of assistance from the Certificate and Voucher programs to the new HCV program began in October 1999. By October 2001, all families receiving tenant-based assistance were converted to the HCV program. On July 29, 2016, the Housing Opportunity Through Modernization Act of 2016 (HOTMA) was signed into law. HOTMA made numerous changes to statutes governing HUD programs, including sections of the United States Housing Act of 1937. Title I of HOTMA contains 14 different sections that impact the public housing and Section 8 programs.

• The Final Rule implementing broad changes to income and assets in Sections 102 and

104 of HOTMA, and for PHAs that administer the public housing program over-income provisions in Section 103, was officially published in the Federal Register on February 14, 2023. On September 29, 2023, HUD issued notice PIH 2023-27, which provided guidance to PHAs on the implementation of the program changes described in the Final Rule. HUD issued a revised version of the notice on February 2, 2024.

• The Final Rule implementing streamlining changes to the HCV and PBV programs was

published on May 7, 2024, and codified certain provisions in Sections 101, 105, 106, and 112 of HOTMA as well as incorporating changes from the NSPIRE final rule.

1-II.B. HCV PROGRAM BASICS

The purpose of the HCV program is to provide rental assistance to eligible families. The rules and regulations of the HCV program are determined by the U.S. Department of Housing and Urban Development. The PHA is afforded choices in the operation of the program which are included in the PHA's administrative plan, a document approved by the board of commissioners of the PHA. The HCV program offers mobility to eligible families because they may search for suitable housing anywhere in the PHA's jurisdiction and may also be eligible to move under portability to other PHAs' jurisdictions. When a family is determined to be eligible for the program and funding is available, the PHA issues the family a housing voucher. When the family finds a suitable housing unit and funding is available, the PHA will enter into a contract with the owner and the family will enter into a lease with the owner. Each party makes their respective payment to the owner so that the owner receives full rent. Even though the family is determined to be eligible for the program, the owner has the responsibility of approving the family as a suitable renter. The PHA continues to make payments to the owner as long as the family is eligible and the housing unit continues to qualify under the program.

1-II.C. THE HCV PARTNERSHIPS

To administer the HCV program, the PHA enters into a contractual relationship with HUD (Consolidated Annual Contributions Contract). The PHA also enters into contractual relationships with the assisted family and the owner or landlord of the housing unit. For the HCV program to work and be successful, all parties involved – HUD, the PHA, the owner, and the family – have important roles to play. The roles and responsibilities of all parties are defined in federal regulations and in legal documents that parties execute to participate in the program. The chart on the following page illustrates key aspects of these relationships.

What Does HUD Do? HUD has the following major responsibilities:

• Develop regulations, requirements, handbooks, notices and other guidance to implement

HCV housing program legislation passed by Congress;

• Allocate HCV program funds to PHAs;
• Provide technical assistance to PHAs on interpreting and applying HCV program

requirements;

• Monitor PHA compliance with HCV program requirements and PHA performance in

program administration. What Does the PHA Do? The Authority administers the HCV program under contract with HUD and has the following major responsibilities:

• Establish local policies to administer the program;
• Review applications from interested applicants to determine whether they are eligible for

the program;

• Maintain a waiting list and select families for admission;
• Issue vouchers to eligible families and provide information on how to lease a unit;
• Conduct outreach to owners, with special attention to owners outside areas of poverty or

minority concentration;

• Approve the rental unit (including assuring compliance with housing quality standards and

rent reasonableness), the owner, and the tenancy;

• Make housing assistance payments to the owner in a timely manner;
• Recertify families for continued eligibility under the program;
• Ensure that owners and families comply with their contractual obligations;
• Provide families and owners with prompt, professional service;
• Comply with all fair housing and equal opportunity requirements, HUD regulations and

requirements, the ACC, HUD-approved applications for funding, the PHA's administrative plan, and other applicable federal, state and local laws.

What Does the Owner Do? The owner has the following major responsibilities:

• Screen families who apply for tenancy, to determine suitability as renters.

- The PHA can provide some information to the owner, but the primary responsibility for tenant screening rests with the owner. - The owner should consider family background factors such as rent and bill-paying history, history of caring for property, respecting the rights of others to peaceful enjoyment of the property, compliance with essential conditions of tenancy, whether the family is engaging in drug-related criminal activity or other criminal activity that might threaten others.

• Comply with the terms of the Housing Assistance Payments contract executed with the

Authority;

• Comply with all applicable fair housing laws and do not discriminate against anyone;
• Maintain the housing unit in accordance with minimum quality standards developed by HUD

in accordance with 24 CFR 5.703 (including any variations approved by HUD for the PHA) and make necessary repairs in a timely manner;

• Collect rent due from the assisted family and otherwise comply with and enforce provisions

of the dwelling lease.

What Does the Family Do? The family has the following responsibilities:

• Provide the Authority with complete and accurate information as determined by the

Authority to be necessary for administration of the program;

• Make their best and most timely efforts to locate qualified and suitable housing;
• Attend all appointments scheduled by the Authority;
• Allow the Authority to inspect the unit at reasonable times and after reasonable notice;
• Take responsibility for care of the housing unit, including any violations of housing quality

standards caused by the family;

• Comply with the terms of the lease with the owner;
• Comply with the family obligations of the voucher;
• Not commit serious or repeated violations of the lease;
• Not engage in drug-related or violent criminal activity;
• Notify the Authority and the owner before moving or terminating the lease;
• Use the assisted unit only for residence and as the sole residence of the family. Not sublet the

unit, assign the lease, or have any interest in the unit;

• Promptly notify the Authority of any changes in family composition;
• Not commit fraud, bribery, or any other corrupt or criminal act in connection with any

housing programs.

1-II.D. APPLICABLE REGULATIONS

Applicable regulations include:

• 24 CFR Part 5: General Program Requirements
• 24 CFR Part 8: Nondiscrimination
• 24 CFR Part 35: Lead-Based Paint
• 24 CFR Part 100: The Fair Housing Act
• 24 CFR Part 982: Section 8 Tenant-Based Assistance: Housing Choice Voucher Program
• 24 CFR Part 983: Project-Based Vouchers
• 24 CFR Part 985: The Section 8 Management Assessment Program (SEMAP)

Part Iii: The Hcv Administrative Plan

1-III.A. OVERVIEW AND PURPOSE OF THE PLAN

The administrative plan is required by HUD. The purpose of the administrative plan is to establish policies for carrying out the programs in a manner consistent with HUD requirements and local goals and objectives contained in the PHA's agency plan. This administrative plan is a supporting document to the PHA agency plan and is available for public review as required by CFR 24 Part 903. This administrative plan is set forth to define the PHA's local policies for operation of the housing programs in accordance with federal laws and regulations. All issues related to the HCV program not addressed in this document are governed by such federal regulations, HUD handbooks and guidebooks, notices, and other applicable law. The policies in this administrative plan have been designed to ensure compliance with the consolidated ACC and all HUD- approved applications for program funding. The PHA is responsible for complying with all changes in HUD regulations pertaining to the HCV program. If such changes conflict with this plan, HUD regulations will have precedence. Administration of the HCV program and the functions and responsibilities of PHA staff shall be in compliance with the PHA's personnel policy and HUD regulations as well as all federal, state and local fair housing laws and regulations.

1-III.B. CONTENTS OF THE PLAN [24 CFR 982.54]

The HUD regulations at 24 CFR 982.54 define the policies that must be included in the administrative plan. They are as follow:

• Selection and admission of applicants from the PHA waiting list, including any PHA

admission preferences, procedures for removing applicant names from the waiting list, and procedures for closing and reopening the PHA waiting list (Chapter 4);

• Issuing or denying vouchers, including PHA policy governing the voucher term and any

extensions of the voucher term. If the PHA decides to allow extensions of the voucher term, the PHA administrative plan must describe how the PHA determines whether to grant extensions, and how the PHA determines the length of any extension (Chapter 5);

• Any special rules for use of available funds when HUD provides funding to the PHA for a

special purpose (e.g., desegregation), including funding for specified families or a specified category of families (Chapter 4);

• Occupancy policies, including definition of what group of persons may qualify as a 'family',

definition of when a family is considered to be 'continuously assisted'; standards for denying admission or terminating assistance based on criminal activity or alcohol abuse in accordance with 982.553 (Chapters 3 and 12);

• Encouraging participation by owners of suitable units located outside areas of low income or

minority concentration (Chapter 13);

• Assisting a family that claims that illegal discrimination has prevented the family from

leasing a suitable unit (Chapter 2);

• Providing information about a family to prospective owners (Chapters 3 and 9);
• Disapproval of owners (Chapter 13);
• Subsidy standards (Chapter 5);
• Family absence from the dwelling unit (Chapter 12);
• How to determine who remains in the program if a family breaks up (Chapter 3);
• Informal review procedures for applicants (Chapter 16);
• Informal hearing procedures for participants (Chapter 16);
• The process for establishing and revising voucher payment standards (Chapter 16);
• Policies on administering decreases and increases in the payment standard during the HAP

contract term (Chapter 6);

• The method of determining that rent to owner is a reasonable rent (initially and during the

term of a HAP contract) (Chapter 8);

• Special policies concerning special housing types in the program (e.g., use of shared housing)

(Chapter 15);

• Policies concerning payment by a family to the PHA of amounts the family owes the PHA

(Chapter 16);

• Interim redeterminations of family income and composition (Chapter 11);
• Restrictions, if any, on the number of moves by a participant family (Chapter 10);
• Approval by the board of commissioners or other authorized officials to charge the

administrative fee reserve (Chapter 16);

• Procedural guidelines and performance standards for conducting required housing quality

standards inspections (Chapter 8);

• PHA screening of applicants for family behavior or suitability for tenancy (Chapter 3);
• Policies governing the project-basing of vouchers in both the standard Project-Based

Voucher (PBV) program (Chapter 17); and the RAD Project-Based Voucher program (Chapter 18); and

• Family Self Sufficiency (Chapter 19).

Mandatory vs. Discretionary Policy HUD makes a distinction between:

• Mandatory policies: those driven by legislation, regulations, current handbooks,

notices, and legal opinions, and

• Optional, non-binding guidance, including guidebooks, notices that have expired and

recommendations from individual HUD staff. HUD expects PHAs to adopt local policies and procedures that are consistent with mandatory policies in areas where HUD gives the PHA discretion. The PHA's administrative plan is the foundation of those policies and procedures. HUD's directions require PHAs to make policy choices that provide sufficient guidance to staff and ensure consistency to program applicants and participants. Creating policies based upon HUD guidance is not mandatory but provides a PHA with a "safe harbor." HUD has already determined that the recommendations and suggestions it makes are consistent with mandatory policies. If a PHA adopts an alternative strategy, it must make its own determination that the alternative approach is consistent with legislation, regulations, and other mandatory requirements. There may be very good reasons for adopting a policy or procedure that is different than HUD's safe harbor, but PHAs should carefully think through those decisions.

1-III.C. ORGANIZATION OF THE PLAN

The plan is organized to provide information to users in particular areas of operation.

1-III.D. UPDATING AND REVISING THE PLAN

The Authority will revise this administrative plan as needed to comply with changes in HUD regulations. The original plan and any changes must be approved by the board of commissioners of the agency, the pertinent sections included in the Agency Plan, and a copy provided to HUD.

FAIR HOUSING AND EQUAL OPPORTUNITY

INTRODUCTION This chapter explains the laws and HUD regulations requiring PHAs to affirmatively further civil rights and fair housing in all federally assisted housing programs. The letter and spirit of these laws are implemented through consistent policy and processes. The responsibility to further nondiscrimination pertains to all areas of the PHA's housing choice voucher (HCV) operations. This chapter describes HUD regulations and PHA policies related to these topics in three parts: Part I: Nondiscrimination. This part presents the body of laws and regulations governing the responsibilities of the PHA regarding nondiscrimination. Part II: Policies Related to Persons with Disabilities. This part discusses the rules and policies of the housing choice voucher program related to reasonable accommodation for persons with disabilities. These rules and policies are based on the Fair Housing Act (42.U.S.C.) and Section 504 of the Rehabilitation Act of 1973, and incorporate guidance from the Joint Statement of The Department of Housing and Urban Development and the Department of Justice (DOJ), issued May 17, 2004. Part III: Prohibition of Discrimination Against Limited English Proficiency Persons. This part details the obligations of the PHA to ensure meaningful access to the HCV program and its activities by persons with limited English proficiency (LEP). This part incorporates the Final Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition against National Origin Discrimination Affecting Limited English Proficient Persons published January 22, 2007, in the Federal Register.

Part I: Nondiscrimination

2-I.A. OVERVIEW

Federal laws require PHAs to treat all applicants and participants equally, providing the same opportunity to access services, regardless of family characteristics and background. Federal law prohibits discrimination in housing on the basis of race, color, religion, sex, national origin, age, familial status, and disability. In addition, HUD regulations provide for additional protections regarding sexual orientation, gender identity, and marital status. The PHA will comply fully with all federal, state, and local nondiscrimination laws, and with rules and regulations governing fair housing and equal opportunity in housing and employment, including:

• Title VI of the Civil Rights Act of 1964
• Title VIII of the Civil Rights Act of 1968 (as amended by the Community Development Act

of 1974 and the Fair Housing Amendments Act of 1988)

• Executive Orders 11063 and 13988
• Section 504 of the Rehabilitation Act of 1973
• The Age Discrimination Act of 1975
• Title II of the Americans with Disabilities Act (to the extent that it applies, otherwise

Section 504 and the Fair Housing Amendments govern)

• The Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender

Identity Final Rule, published in the Federal Register February 3, 2012 and further clarified in Notice PIH 2014-20

• Violence Against Women Act (VAWA)

When more than one civil rights law applies to a situation, the laws will be read and applied together. Any applicable state laws or local ordinances and any legislation protecting individual rights of tenants, applicants, or staff that may subsequently be enacted will also apply.

2-I.B. NONDISCRIMINATION

Federal regulations prohibit discrimination against certain protected classes and other groups of people. State and local requirements, as well as PHA policies, can prohibit discrimination based on other factors. The PHA shall not discriminate because of race, color, sex, religion, familial status, age, disability or national origin (called "protected classes") Familial status includes children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18. The PHA will not discriminate on the basis of marital status, gender identity, or sexual orientation [FR Notice 02/03/12; Executive Order 13988].

• Race
• Color
• National origin (including language use restrictions)
• Ancestry
• Religion
• Sex
• Gender, gender identity, and gender expression
• Sexual orientation
• Marital status
• Military or veteran status
• Familial status (households with children under age 18 or individuals who are

pregnant)

• Source of income
• Disability (mental and physical)
• Genetic information
• Age*
• Citizenship*
• Primary language*
• Immigration status*

*Covered under the Unruh Civil Rights Act, which applies to most housing accommodations in California. All other characteristics are covered under the Fair Employment and Housing Act. The PHA will not use any of these factors to:

• Deny to any family the opportunity to apply for housing, nor deny to any qualified applicant

the opportunity to participate in the housing choice voucher program

• Provide housing that is different from that provided to others
• Subject anyone to segregation or disparate treatment
• Subject anyone to sexual harassment
• Restrict anyone's access to any benefit enjoyed by others in connection with the housing

program

• Treat a person differently in determining eligibility or other requirements for admission
• Steer an applicant or participant toward or away from a particular area based any of these

factors

• Deny anyone access to the same level of services
• Deny anyone the opportunity to participate in a planning or advisory group that is an integral

part of the housing program

• Discriminate in the provision of residential real estate transactions
• Discriminate against someone because they are related to or associated with a member of a

protected class

• Publish or cause to be published an advertisement or notice indicating the availability of

housing that prefers or excludes persons who are members of a protected class Providing Information to Families and Owners The PHA must take steps to ensure that families and owners are fully aware of all applicable civil rights laws. As part of the briefing process, the PHA must provide information to HCV applicant families about civil rights requirements and the opportunity to rent in a broad range of neighborhoods [24 CFR 982.301]. The Housing Assistance Payments (HAP) contract informs owners of the requirement not to discriminate against any person because of race, color, religion, sex, national origin, age, familial status, or disability in connection with the contract.

2-I.C. DISCRIMINATION COMPLAINTS

General Housing Discrimination Complaints If an applicant or participant believes that any family member has been discriminated against by the PHA or an owner, the family should advise the PHA. The PHA should make every reasonable attempt to determine whether the applicant's or participant's assertions have merit and take any warranted corrective action. In all cases, the PHA will advise the family that they may file a fair housing complaint if the family feels they have been discriminated against under the Fair Housing Act.

VAWA Complaint Processing [Notice FHEO 2023-01] A complainant may, not later than one year after an alleged VAWA violation has occurred or terminated, file a complaint with FHEO alleging such violation. If there is a violation that began prior to a year before the complaint is filed, but it continues into the one-year time period, HUD will accept the complaint. FHEO will investigate the complaint if it is timely and FHEO otherwise has jurisdiction. If a complaint is filed more than one year after the alleged violation occurred or terminated, FHEO may, but is not required to, investigate the allegations under the additional authority and procedures described in FHEO 2023-01. Complaints do not need to allege a violation of the Fair Housing Act for FHEO to accept and investigate the complaint.

Part Ii: Policies Related To Persons With Disabilities

2-II.A. OVERVIEW

One type of disability discrimination prohibited by the Fair Housing Act is the refusal to make reasonable accommodation in rules, policies, practices, or services when such accommodation may be necessary to afford a person with a disability the equal opportunity to use and enjoy a program or dwelling under the program. The PHA must ensure that persons with disabilities have full access to the PHA's programs and services. This responsibility begins with the first contact by an interested family and continues through every aspect of the program.

2-II.B. DEFINITION OF REASONABLE ACCOMMODATION

A reasonable accommodation is an adjustment made to a rule, policy, practice, or service that allows a person with a disability to have equal access to the HCV program. For example, reasonable accommodations may include making home visits, extending the voucher term, or approving an exception payment standard in order for a participant to lease an accessible dwelling unit. Federal regulations stipulate that requests for accommodations will be considered reasonable if they do not create an "undue financial and administrative burden" for the PHA, or result in a "fundamental alteration" in the nature of the program or service offered. A fundamental alteration is a modification that alters the essential nature of a provider's operations. Types of Reasonable Accommodations When needed, the PHA will modify normal procedures to accommodate the needs of a person with disabilities. Examples include:

• Permitting applications and reexaminations to be completed by mail
• Conducting home visits
• Using higher payment standards (either within the acceptable range or with HUD approval of

a payment standard outside the PHA range) if the PHA determines this is necessary to enable a person with disabilities to obtain a suitable housing unit

• Providing time extensions for locating a unit when necessary because of lack of availability

of accessible units or special challenges of the family in seeking a unit

• Permitting an authorized designee or advocate to participate in the application or certification

process and any other meetings with PHA staff

• Allowing for exceptions to the PHA's subsidy standards

• Allowing a change in the family's rent due date to correspond with the receipt of the head of

household, or spouse or cohead's SSI or SSDI benefits

2-II.C. REQUEST FOR AN ACCOMMODATION

If an applicant or participant indicates that an exception, change, or adjustment to a rule, policy, practice, or service is needed because of a disability, HUD requires that the PHA treat the information as a request for a reasonable accommodation, even if no formal request is made [Joint Statement of the Departments of HUD and Justice: Reasonable Accommodations under the Fair Housing Act]. The family must explain what type of accommodation is needed to provide the person with the disability full access to the PHA's programs and services. If the need for the accommodation is not readily apparent or known to the PHA, the family must explain the relationship between the requested accommodation and the disability. There must be an identifiable connection, or nexus, between the requested accommodation and the individual's disability.

2-II.D. VERIFICATION OF DISABILITY

The regulatory civil rights definition for persons with disabilities is provided in Exhibit 2-1 at the end of this chapter. The definition of a person with a disability for the purpose of obtaining a reasonable accommodation is much broader than the HUD definition of disability which is used for waiting list preferences and income allowances. Before providing an accommodation, the PHA must determine that the person meets the definition of a person with a disability, and that the accommodation will enhance the family's access to the PHA's programs and services.

If a person's disability is obvious or otherwise known to the PHA, and if the need for the requested accommodation is also readily apparent or known, no further verification will be required [Joint Statement of the Departments of HUD and Justice: Reasonable Accommodations under the Fair Housing Act]. If a family indicates that an accommodation is required for a disability that is not obvious or otherwise known to the PHA, the PHA must verify that the person meets the definition of a person with a disability, and that the limitations imposed by the disability require the requested accommodation. When verifying a disability, the PHA will follow the verification policies provided in Chapter 7. All information related to a person's disability will be treated in accordance with the confidentiality policies provided in Chapter 16. In addition to the general requirements that govern all verification efforts, the following requirements apply when verifying a disability:

• Third-party verification must be obtained from an individual identified by the family who is

competent to make the determination. A doctor or other medical professional, a peer support group, a non-medical service agency, or a reliable third party who is in a position to know about the individual's disability may provide verification of a disability [Joint Statement of the Departments of HUD and Justice: Reasonable Accommodations under the Fair Housing Act]

• The PHA must request only information that is necessary to evaluate the disability-related

need for the accommodation. The PHA will not inquire about the nature or extent of any disability.

• Medical records will not be accepted or retained in the participant file.
• In the event that the PHA does receive confidential information about a person's specific

diagnosis, treatment, or the nature or severity of the disability, the PHA will dispose of it. In place of the information, the PHA will note in the file that the disability and other requested information have been verified, the date the verification was received, and the name and address of the knowledgeable professional who sent the information [Notice PIH 2010-26].

2-II.E. APPROVAL/DENIAL OF A REQUESTED ACCOMMODATION [Joint Statement

of the Departments of HUD and Justice: Reasonable Accommodations under the Fair Housing Act, Notice PIH 2010-26]. The PHA must approve a request for an accommodation if the following three conditions are met:

• The request was made by or on behalf of a person with a disability.
• There is a disability-related need for the accommodation.
• The requested accommodation is reasonable, meaning it would not impose an undue

financial and administrative burden on the PHA, or fundamentally alter the nature of the PHA's HCV operations (including the obligation to comply with HUD requirements and regulations). Requests for accommodations must be assessed on a case-by-case basis, taking into account factors such as the overall size of the PHA's program with respect to the number of employees,

type of facilities and size of budget, type of operation including composition and structure of workforce, the nature and cost of the requested accommodation, and the availability of alternative accommodations that would effectively meet the family's disability-related needs. Before making a determination whether to approve the request, the PHA may enter into discussion and negotiation with the family, request more information from the family, or may require the family to sign a consent form so that the PHA may verify the need for the requested accommodation.

2-II.F. PROGRAM ACCESSIBILITY FOR PERSONS WITH HEARING OR VISION

IMPAIRMENTS HUD regulations require the PHA to ensure that persons with disabilities related to hearing and vision have reasonable access to the PHA's programs and services [24 CFR 8.6]. At the initial point of contact with each applicant, the PHA shall inform all applicants of alternative forms of communication that can be used other than plain language paperwork.

and explain housing materials and be present at all meetings.

2-II.G. PHYSICAL ACCESSIBILITY

The PHA must comply with a variety of regulations pertaining to physical accessibility, including the following:

• Notice PIH 2010-26
• Section 504 of the Rehabilitation Act of 1973
• The Americans with Disabilities Act of 1990
• The Architectural Barriers Act of 1968
• The Fair Housing Act of 1988

The PHA's policies concerning physical accessibility must be readily available to applicants and participants. They can be found in three key documents:

• This plan describes the key policies that govern the PHA's responsibilities with regard to

physical accessibility.

• Notice PIH 2010-26 summarizes information about pertinent laws and implementing

regulations related to nondiscrimination and accessibility in federally-funded housing programs.

• The PHA Plan provides information about self-evaluation, needs assessment, and transition

plans. The design, construction, or alteration of PHA facilities must conform to the Uniform Federal Accessibility Standards (UFAS). Newly-constructed facilities must be designed to be readily accessible to and usable by persons with disabilities. Alterations to existing facilities must be accessible to the maximum extent feasible, defined as not imposing an undue financial and administrative burden on the operations of the HCV program. When issuing a voucher to a family that includes an individual with disabilities, the PHA will include a current list of available accessible units known to the PHA and will assist the family in locating an available accessible unit, if necessary. In general, owners must permit the family to make reasonable modifications to the unit. However, the owner is not required to pay for the modification and may require that the unit be restored to its original state at the family's expense when the family moves.

2-II.H. DENIAL OR TERMINATION OF ASSISTANCE

A PHA's decision to deny or terminate the assistance of a family that includes a person with disabilities is subject to consideration of reasonable accommodation [24 CFR 982.552 (2)(iv)]. When applicants with disabilities are denied assistance, the notice of denial must inform them of the PHA's informal review process and their right to request an informal review. In addition, the notice must inform applicants with disabilities of their right to request reasonable accommodations to participate in the informal review process. When a participant family's assistance is terminated, the notice of termination must inform them of the PHA's informal hearing process and their right to request a hearing and reasonable accommodation. When reviewing reasonable accommodation requests, the PHA must consider whether any mitigating circumstances can be verified to explain and overcome the problem that led to the PHA's decision to deny or terminate assistance. If a reasonable accommodation will allow the family to meet the requirements, the PHA must make the accommodation.

PART III: IMPROVING ACCESS TO SERVICES FOR PERSONS WITH LIMITED

ENGLISH PROFICIENCY (LEP)

2-III.A. OVERVIEW

Language for Limited English Proficiency Persons (LEP) can be a barrier to accessing important benefits or services, understanding and exercising important rights, complying with applicable responsibilities, or understanding other information provided by the HCV program. In certain circumstances, failure to ensure that LEP persons can effectively participate in or benefit from federally-assisted programs and activities may violate the prohibition under Title VI against discrimination on the basis of national origin. This part incorporates the Final Guidance to Federal Assistance Recipients Regarding Title VI Prohibition against National Origin Discrimination Affecting Limited English Proficient Persons, published January 22, 2007, in the Federal Register. The PHA will take affirmative steps to communicate with people who need services or information in a language other than English. These persons will be referred to as Persons with Limited English Proficiency (LEP). LEP is defined as persons who do not speak English as their primary language and who have a limited ability to read, write, speak or understand English. For the purposes of this administrative plan, LEP persons are HCV applicants and participants, and parents and family members of applicants and participants.

In order to determine the level of access needed by LEP persons, the PHA will balance the following four factors: (1) the number or proportion of LEP persons eligible to be served or likely to be encountered by the Housing Choice Voucher program; (2) the frequency with which LEP persons come into contact with the program; (3) the nature and importance of the program, activity, or service provided by the program to people's lives; and (4) the resources available to the PHA and costs. Balancing these four factors will ensure meaningful access by LEP persons to critical services while not imposing undue burdens on the PHA.

2-III.B. ORAL INTERPRETATION

The PHA will offer competent interpretation services free of charge, upon request, to the LEP person.

2-III.C. WRITTEN TRANSLATION

Translation is the replacement of a written text from one language into an equivalent written text in another language.

2-III.D. IMPLEMENTATION PLAN

After completing the four-factor analysis and deciding what language assistance services are appropriate, the PHA shall determine whether it is necessary to develop a written implementation plan to address the identified needs of the LEP populations it serves. If the PHA determines that it is not necessary to develop a written implementation plan, the absence of a written plan does not obviate the underlying obligation to ensure meaningful access by LEP persons to the PHA's Housing Choice Voucher program and services.

EXHIBIT 2-1: DEFINITION OF A PERSON WITH A DISABILITY UNDER FEDERAL CIVIL RIGHTS LAWS [24 CFR Parts 8.3 and 100.201] A person with a disability, as defined under federal civil rights laws, is any person who:

• Has a physical or mental impairment that substantially limits one or more of the major life

activities of an individual, or

• Has a record of such impairment, or
• Is regarded as having such impairment

The phrase "physical or mental impairment" includes:

• Any physiological disorder or condition, cosmetic or disfigurement, or anatomical loss

affecting one or more of the following body systems: neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genito-urinary; hemic and lymphatic; skin; and endocrine; or

• Any mental or psychological disorder, such as mental retardation, organic brain syndrome,

emotional or mental illness, and specific learning disabilities. The term "physical or mental impairment" includes, but is not limited to: such diseases and conditions as orthopedic, visual, speech and hearing impairments, cerebral palsy, autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, mental retardation, emotional illness, drug addiction and alcoholism. "Major life activities" includes, but is not limited to, caring for oneself, performing manual tasks, walking, seeing, hearing, breathing, learning, and/or working. "Has a record of such impairment" means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities. "Is regarded as having an impairment" is defined as having a physical or mental impairment that does not substantially limit one or more major life activities but is treated by a public entity (such as the PHA) as constituting such a limitation; has none of the impairments defined in this section but is treated by a public entity as having such an impairment; or has a physical or mental impairment that substantially limits one or more major life activities, only as a result of the attitudes of others toward that impairment. The definition of a person with disabilities does not include:

• Current illegal drug users
• People whose alcohol use interferes with the rights of others
• Persons who objectively pose a direct threat or substantial risk of harm to others that cannot

be controlled with a reasonable accommodation under the HCV program The above definition of disability determines whether an applicant or participant is entitled to any of the protections of federal disability civil rights laws. Thus, a person who does not meet this disability is not entitled to a reasonable accommodation under federal civil rights and fair housing laws and regulations.

The HUD definition of a person with a disability is much narrower than the civil rights definition of disability. The HUD definition of a person with a disability is used for purposes of receiving the disabled family preference, the $400 elderly/disabled household deduction, the $480 dependent deduction, the allowance for medical expenses, or the allowance for disability assistance expenses. The definition of a person with a disability for purposes of granting a reasonable accommodation request is much broader than the HUD definition of disability. Many people will not qualify as a disabled person under the HCV program, yet an accommodation is needed to provide equal opportunity.

ELIGIBILITY

INTRODUCTION The PHA is responsible for ensuring that every individual and family admitted to the HCV program meets all program eligibility requirements. This includes any individual approved to join the family after the family has been admitted to the program. The family must provide any information needed by the PHA to confirm eligibility and determine the level of the family's assistance. To be eligible for the HCV program:

• The applicant family must:

- Qualify as a family as defined by HUD and the PHA. - Have income at or below HUD-specified income limits. - Qualify on the basis of citizenship or the eligible immigrant status of family members. - Provide social security number information for household members as required. - Consent to the PHA's collection and use of family information as provided for in PHA- provided consent forms. - Not currently be receiving a duplicative subsidy. - Meet net asset and property ownership restriction requirements.

• The PHA must determine that the current or past behavior of household members does not

include activities that are prohibited by HUD or the PHA. This chapter contains three parts: Part I: Definitions of Family and Household Members. This part contains HUD and PHA definitions of family and household members and explains initial and ongoing eligibility issues related to these members. Part II: Basic Eligibility Criteria. This part discusses income eligibility, and rules regarding citizenship, social security numbers, and family consent. Part III: Denial of Assistance. This part covers factors related to an applicant's past or current conduct (e.g., criminal activity) that can cause the PHA to deny assistance as well as the asset limitation for HCV.

Part I: Definitions Of Family And Household Members

3-I.A. OVERVIEW

Some eligibility criteria and program rules vary depending upon the composition of the family requesting assistance. In addition, some requirements apply to the family as a whole and others apply to individual persons who will live in the assisted unit. This part provides information that is needed to correctly identify family and household members, and to apply HUD's eligibility rules.

3-I.B. FAMILY AND HOUSEHOLD [24 CFR 5.403; FR Notice 02/03/12;

Notice PIH 2014-20; and FR Notice 2/14/23] The terms family and household have different meanings in the HCV program. Family To be eligible for assistance, an applicant must qualify as a family. Family as defined by HUD includes, but is not limited to the following, regardless of actual or perceived sexual orientation, gender identity, or marital status, a single person, who may be an elderly person, displaced person, disabled person, near-elderly person, or any other single person; an otherwise eligible youth who has attained at least 18 years of age and not more than 24 years of age and who has left foster care, or will leave foster care within 90 days, in accordance with a transition plan described in section 475(5)(H) of the Social Security Act (42 U.S.C. 675(5)(H)), and is homeless or is at risk of becoming homeless at age 16 or older; or a group of persons residing together. Such group includes but is not limited to a family with or without children (a child who is temporarily away from the home because of placement in foster care is considered a member of the family), an elderly family, a near-elderly family, a disabled family, a displaced family, and the remaining member of a tenant family. The PHA has the discretion to determine if any other group of persons qualifies as a family. Gender Identity means actual or perceived gender characteristics. Sexual orientation means homosexuality, heterosexuality, or bisexuality.

3-I.C. FAMILY BREAKUP AND REMAINING MEMBER OF TENANT FAMILY

Family Breakup [24 CFR 982.315; Notice PIH 2017-08] Except under the following conditions, the PHA has discretion to determine which members of an assisted family continue to receive assistance if the family breaks up:

• If the family breakup results from an occurrence of domestic violence, dating violence,

sexual assault, stalking, or human trafficking, the PHA must ensure that the victim retains assistance. (For documentation requirements and policies related to domestic violence, dating violence, sexual assault, stalking, and human trafficking, see section 16-IX.D of this plan.)

• In accordance with Notice PIH 2017-08, for HUD–Veterans Affairs Supportive Housing

(HUD–VASH) vouchers, when the veteran is the perpetrator of domestic violence, dating violence, sexual assault, stalking, or human trafficking, the victim must continue to be assisted. Upon termination of the perpetrator's HUD–VASH voucher, the victim should be given a regular HCV if one is available, and the perpetrator's HUD–VASH voucher should be used to serve another eligible family. If a regular HCV is not available, the victim will continue to use the HUD–VASH voucher, which must be issued to another eligible family upon the voucher's turnover.

• If a court determines the disposition of property between members of the assisted family, the

PHA is bound by the court's determination of which family members continue to receive assistance.

Remaining Member of a Tenant Family [24 CFR 5.403] The HUD definition of family includes the remaining member of a tenant family, which is a member of an assisted family who remains in the unit when other members of the family have left the unit. Household members such as live-in aides, foster children, and foster adults do not qualify as remaining members of a family. If dependents are the only "remaining members of a tenant family" and there is no family member able to assume the responsibilities of the head of household, see Chapter 6, Section 6- I.B, for the policy on "Caretakers for a Child."

3-I.D. HEAD OF HOUSEHOLD [24 CFR 5.504(b)]

Head of household means the adult member of the family who is considered the head for purposes of determining income eligibility and rent. The head of household is responsible for ensuring that the family fulfills all of its responsibilities under the program, alone or in conjunction with a cohead or spouse.

3-I.E. SPOUSE, COHEAD, AND OTHER ADULT

A family may have a spouse or cohead, but not both [HUD-50058 IB, p. 13]. Spouse means the marriage partner of the head of household.

3-I.F. DEPENDENTS AND MINORS [24 CFR 5.603]

A minor is a member of the family, other than the head of family or spouse, who is under 18 years of age. A dependent is a family member who is under 18 years of age or a person of any age who is a person with a disability or a full-time student, except that the following persons can never be dependents: the head of household, spouse, cohead, foster children/adults and live-in aides. Identifying each dependent in the family is important because each dependent qualifies the family for a dependent allowance as described in Chapter 6. Joint Custody of Dependents

3-I.G. FULL-TIME STUDENT [24 CFR 5.603; HCV GB, p. 5-29]

A full-time student (FTS) is a person who is attending school or vocational training on a full-time basis. The time commitment or subject load that is needed to be full-time is defined by the educational institution. Identifying each FTS is important because: (1) each family member that is an FTS, other than the head, spouse, or cohead, qualifies the family for a dependent allowance, and (2) the earned income of such an FTS is treated differently from the income of other family members.

3-I.H. ELDERLY AND NEAR-ELDERLY PERSONS, AND ELDERLY FAMILY

[24 CFR 5.100 and 5.403, FR Notice 02/03/12] Elderly Persons An elderly person is a person who is at least 62 years of age. Near-Elderly Persons A near-elderly person is a person who is 50-61 years of age. Elderly Family An elderly family is one in which the head, spouse, cohead, or sole member is an elderly person. Identifying elderly families is important because elderly families qualify for the elderly family allowance as described in Chapter 6.

3-I.I. PERSONS WITH DISABILITIES AND DISABLED FAMILY [24 CFR 5.403,

FR Notice 02/03/12] Persons with Disabilities Under the HCV program, special rules apply to persons with disabilities and to any family whose head, spouse, or cohead is a person with disabilities. The technical definitions of individual with handicaps and persons with disabilities are provided in Exhibit 3-1 at the end of this chapter. These definitions are used for a number of purposes including ensuring that persons with disabilities are not discriminated against based upon disability. As discussed in Chapter 2, the PHA must make all aspects of the HCV program accessible to persons with disabilities and consider reasonable accommodations requested based upon a person's disability. Disabled Family A disabled family is one in which the head, spouse, or cohead is a person with disabilities. Identifying disabled families is important because these families qualify for the disabled family allowance as described in Chapter 6. Even though persons with drug or alcohol dependencies are considered persons with disabilities, this does not prevent the PHA from denying assistance for reasons related to alcohol and drug abuse in accordance with the policies found in Part III of this chapter, or from terminating assistance in accordance with the policies in Chapter 12.

3-I.J. GUESTS [24 CFR 5.100]

A guest is a person temporarily staying in the unit with the consent of a member of the household who has expressed or implied authority to so consent.

3-I.K. FOSTER CHILDREN AND FOSTER ADULTS [24 CFR 5.603]

A foster adult is a member of the household who is 18 years of age or older and meets the definition of a foster adult under state law. In general, a foster adult is a person who is 18 years of age or older, is unable to live independently due to a debilitating physical or mental condition, and is placed with the family by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. A foster child is a member of the household who meets the definition of a foster child under state law. In general, a foster child is placed with the family by an authorized placement agency (e.g., public child welfare agency) or by judgment, decree, or other order of any court of competent jurisdiction. Foster children and foster adults who are living with an applicant or who have been approved by the PHA to live with a participant family are considered household members but not family members. The income of foster children/adults is not counted in family annual income, and foster children/adults do not qualify for a dependent deduction [24 CFR 5.603; HUD-50058 IB, p. 13].

3-I.L. ABSENT FAMILY MEMBERS

Individuals may be absent from the family, either temporarily or permanently, for a variety of reasons including educational activities, placement in foster care, employment, illness, incarceration, and court order. Definitions of Temporarily and Permanently Absent

Absences Due to Placement in Foster Care [24 CFR 5.403] Children temporarily absent from the home as a result of placement in foster care are considered members of the family.

3-I.M. LIVE-IN AIDE

A live-in aide is a person who resides with one or more elderly persons, or near-elderly persons, or persons with disabilities, and who: (1) is determined to be essential to the care and well-being of the persons, (2) is not obligated for the support of the persons, and (3) would not be living in the unit except to provide the necessary supportive services [24 CFR 5.403]. The Authority must approve a live-in aide if needed as a reasonable accommodation in accordance with 24 CFR 8, to make the program accessible to and usable by the family member with disabilities.

The income of a live-in aide is not counted in the calculation of annual income for the family [24 CFR 5.609(b)]. Relatives may be approved as live-in aides if they meet all of the criteria defining a live-in aide. Because live-in aides are not family members, a relative who serves as a live-in aide would not be considered a remaining member of a tenant family.

Part Ii: Basic Eligibility Criteria

3-II.A. INCOME ELIGIBILITY AND TARGETING

Income Limits HUD establishes income limits for all areas of the country and publishes them annually in the Federal Register. They are based upon estimates of median family income with adjustments for family size. The income limits are used to determine eligibility for the program and for income targeting purposes as discussed in this section. Definitions of the Income Limits [24 CFR 5.603(b)] Low-income family. A family whose annual income does not exceed 80 percent of the median income for the area, adjusted for family size. Very low-income family. A family whose annual income does not exceed 50 percent of the median income for the area, adjusted for family size. Extremely low-income family. A family whose annual income does not exceed the federal poverty level or 30 percent of the median income for the area, whichever number is higher. Area median income is determined by HUD, with adjustments for smaller and larger families. HUD may establish income ceilings higher or lower than 30, 50, or 80 percent of the median income for an area if HUD finds that such variations are necessary because of unusually high or low family incomes. Using Income Limits for Eligibility [24 CFR 982.201 and Notice PIH 2023-27] Income limits are used for eligibility only at admission. Income eligibility is determined by comparing the annual income of an applicant to the applicable income limit for their family size. eligibility; however, household members are considered for purposes of unit size and subsidy standards. In order to be income eligible, an applicant family must be one of the following:

• A very low-income family
• A low-income family that has been "continuously assisted" under the 1937 Housing Act. A

family is considered to be continuously assisted if the family is already receiving assistance under any 1937 Housing Act program at the time the family is admitted to the HCV program [24 CFR 982.4; 24 CFR 982.201(b)]

• A low-income family that qualifies for voucher assistance as a non-purchasing household

living in HOPE 1 (public housing homeownership), HOPE 2 (multifamily housing homeownership) developments, or other HUD-assisted multifamily homeownership programs covered by 24 CFR 248.173

• A low-income or moderate-income family that is displaced as a result of the prepayment of

a mortgage or voluntary termination of a mortgage insurance contract on eligible low- income housing as defined in 24 CFR 248.101.

• A low-income family is eligible for assistance under VASH [FR Notice 8/13/24].

HUD permits the Authority to establish additional categories of low-income families that may be determined eligible. The additional categories must be consistent with the Authority plan and the consolidated plans for local governments within the Authority's jurisdiction.

3-II.B. CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS [24 CFR 5, Subpart E]

Housing assistance is available only to individuals who are U.S. citizens, U.S. nationals (herein referred to as citizens and nationals), or noncitizens that have eligible immigration status. At least one family member must be a citizen, national, or noncitizen with eligible immigration status in order for the family to qualify for any level of assistance.

All applicant families must be notified of the requirement to submit evidence of their citizenship status when they apply. Where feasible, and in accordance with the PHA's Limited English Proficiency Plan, the notice must be in a language that is understood by the individual if the individual is not proficient in English. Declaration [24 CFR 5.508] HUD requires each family member to declare whether the individual is a citizen, a national, or an eligible noncitizen, except those members who elect not to contend that they have eligible immigration status. Those who elect not to contend their status are considered to be ineligible noncitizens. For citizens, nationals and eligible noncitizens the declaration must be signed personally by the head, spouse, cohead, and any other family member 18 or older, and by a parent or guardian for minors. The family must identify in writing any family members who elect not to contend their immigration status (see Ineligible Noncitizens below). No declaration is required for live-in aides, foster children, or foster adults. U.S. Citizens and Nationals

In general, citizens and nationals are required to submit only a signed declaration as verification of their status. However, HUD regulations permit the Authority to request additional documentation of their status, such as a passport.

or family members have submitted documentation to the PHA in accordance with program requirements [24 CFR 5.512(a)].

3-II.C. SOCIAL SECURITY NUMBERS [24 CFR 5.216 and 5.218, Notice PIH 2018-24]

The applicant and all members of the applicant's household must disclose the complete and accurate social security number (SSN) assigned to each household member, and the documentation necessary to verify each SSN. If a child under age 6 has been added to an applicant family within 6 months prior to voucher issuance, an otherwise eligible family may be admitted to the program and must disclose and document the child's SSN within 90 days of the effective date of the initial HAP contract. A detailed discussion of acceptable documentation is provided in Chapter 7. Note: These requirements do not apply to noncitizens who do not contend eligible immigration status.

The PHA must deny assistance to an applicant family if they do not meet the SSN disclosure and documentation requirements contained in 24 CFR 5.216.

3-II.D. FAMILY CONSENT TO RELEASE OF INFORMATION [24 CFR 5.230, 24 CFR

5.232, and HCV GB, p. 5-13] HUD requires that each adult family member, and the head of household, spouse, or cohead, regardless of age, sign form HUD-9886-A, Authorization for the Release of Information/Privacy Act Notice, the form HUD-52675 Debts Owed to Public Housing Agencies and Terminations, and other consent forms as needed to collect information relevant to the family's eligibility and level of assistance. Chapter 7 provides detailed information concerning the consent forms and verification requirements. The consent form remains effective until the family is denied assistance, assistance is terminated, or the family provides written notification to revoke consent. The PHA must deny admission to the program if any member of the applicant family fails to sign and submit the consent forms for obtaining information in accordance with 24 CFR 5, Subparts B and F [24 CFR 982.552(b)(3) and 24 CFR 5.232(a)]. Upon the PHA's HOTMA 102/104 compliance date, the following on revocation of consent is added: However, this does not apply if the applicant or participant, or any member of their family, revokes their consent with respect to the ability of the PHA to access financial records from financial institutions, unless the PHA establishes a policy that revocation of consent to access financial records will result in denial of admission or termination of assistance [24 CFR 5.232(c)]

3-II.E. STUDENTS ENROLLED IN INSTITUTIONS OF HIGHER EDUCATION

[24 CFR 5.612, FR Notice 4/10/06, FR Notice 9/21/16] Section 327 of Public Law 109-115 and the implementing regulation at 24 CFR 5.612 established restrictions on the eligibility of certain students (both part- and full-time) who are enrolled in institutions of higher education. If a student enrolled at an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the student's eligibility must be examined along with the income eligibility of the student's parents. In these cases, both the student and the student's parents must be income eligible for the student to receive HCV assistance. If, however, a student in these circumstances is determined independent from their parents in accordance with PHA policy, the income of the student's parents will not be considered in determining the student's eligibility. The law does not apply to students who reside with parents who are applying to receive HCV assistance. It is limited to students who are seeking assistance on their own, separately from their parents.

Definitions In determining whether and how the eligibility restrictions apply to a student, the PHA will rely on the following definitions [FR Notice 4/10/06, FR Notice 9/21/16]. Dependent Child In the context of the student eligibility restrictions, dependent child means a dependent child of a student enrolled in an institution of higher education. The dependent child must also meet the definition of dependent in 24 CFR 5.603, which states that the dependent must be a member of the assisted family, other than the head of household or spouse, who is under 18 years of age, or is a person with a disability, or is a full-time student. Foster children and foster adults are not considered dependents. Independent Student

The individual has been verified during the school year in which the application is submitted as either an unaccompanied youth who is a homeless child or youth, or as unaccompanied, at risk of homelessness, and self-supporting by: A local educational agency homeless liaison The director of a program funded under subtitle B of title IV of the McKinney-Vento Homeless Assistance Act or a designee of the director A financial aid administrator The individual is a student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances The individual was not claimed as a dependent by their parents pursuant to IRS regulations, as demonstrated on the parents' most recent tax forms. The individual provides a certification of the amount of financial assistance that will be provided by their parents. This certification must be signed by the individual providing the support and must be submitted even if no assistance is being provided. If the PHA determines that an individual meets the definition of a vulnerable youth such a determination is all that is necessary to determine that the person is an independent student for the purposes of using only the student's income for determining eligibility for assistance. The PHA will verify that a student meets the above criteria in accordance with the policies in Section 7-II.E. Institution of Higher Education The PHA will use the statutory definition under section 102 of the Higher Education Act of 1965 to determine whether a student is attending an institution of higher education (see Exhibit 3-2). Parents

Veteran

If the Authority determines that the student, the student's parents (if applicable), or the student's "family" is not eligible, the Authority will send a notice of denial in accordance with the policies in Section 3-III.F, and the applicant family will have the right to request an informal review in accordance with the policies in Section 16-III.B. Determining Parental Income Eligibility

3-II.F. EIV SYSTEM SEARCHES [EIV FAQs; EIV System Training 9/30/20; and

Notice PIH 2023-27] Existing Tenant Search Prior to admission to the program, the PHA must search for all household members using the EIV Existing Tenant Search module. The PHA must review the reports for any SSA matches involving another PHA or a multifamily entity and follow up on any issues identified. The PHA must provide the family with a copy of the Existing Tenant Search results if requested. At no time may any family member receive duplicative assistance. If the tenant is a new admission to the PHA, and a match is identified at a multifamily property, the PHA must report the program admission date to the multifamily property and document the notification in the tenant file. The family must provide documentation of move-out from the assisted unit, as applicable.

participation. The Authority will only approve assistance contingent upon the move-out from the currently occupied assisted unit. Debts Owed to PHAs and Terminations All adult household members must sign the form HUD-52675 Debts Owed to Public Housing and Terminations. Prior to admission to the program, the PHA must search for each adult family member in the Debts Owed to PHAs and Terminations module. If a current or former tenant disputes the information in the module, the tenant should contact the PHA directly in writing to dispute the information and provide any documentation that supports the dispute. If the PHA determines that the disputed information is incorrect, the PHA will update or delete the record from EIV. Former tenants may dispute debt and termination information for a period of up to three years from the end of participation date in the program.

Part Iii: Denial Of Assistance

3-III.A. OVERVIEW

A family that does not meet the eligibility criteria discussed in Parts I and II, must be denied assistance. A PHA may deny assistance for an applicant because of the family's action or failure to act as described in 24 CFR 982.552 or 982.553. In this section we will discuss other situations and circumstances in which denial of assistance is mandatory for the PHA, and those in which denial of assistance is optional for the PHA. While the regulations state that the PHA must prohibit admission for certain types of criminal activity and give the PHA the option to deny for other types of previous criminal history, more recent HUD rules and OGC guidance must also be taken into consideration when determining whether a particular individual's criminal history merits denial of admission. When considering any denial of admission, PHAs may not use arrest records as the basis for the denial. Further, HUD does not require the adoption of "One Strike" policies and reminds PHAs of their obligation to safeguard the due process rights of applicants and tenants [Notice PIH 2015-19]. HUD's Office of General Counsel issued a memo on April 4, 2016, regarding the application of the Fair Housing Act when their policy or practice has an unjustified discriminatory effect, even when the PHA had no intention to discriminate. Where a policy or practice that restricts admission based on criminal history has a disparate impact on a particular race, national origin, or other protected class, that policy or practice is in violation of the Fair Housing Act if it is not necessary to serve a substantial, legitimate, nondiscriminatory interest of the PHA, or if that interest could be served by another practice that has a less discriminatory effect [OGC Memo 4/4/16]. HUD codified this stance on disparate impact and discriminatory effects in a final rule dated March 31, 2023. In doing so, HUD also standardized its long-practiced three-step approach to assessing burdens of proof. PHAs who impose blanket prohibitions on any person with any conviction record, no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then will be unable to show that such policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest. Even a PHA with a more tailored policy or practice that excludes individuals with only certain types of convictions must still prove that its policy is necessary. To do this, the PHA must show that its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and property and criminal conduct that does not.

Forms of Denial [24 CFR 982.552(a)(2); HCV GB, p. 5-35] Denial of assistance includes any of the following:

• Not placing the family's name on the waiting list
• Denying or withdrawing a voucher
• Not approving a request for tenancy or refusing to enter into a HAP contract
• Refusing to process a request for or to provide assistance under portability procedures

Prohibited Reasons for Denial of Program Assistance [24 CFR 982.202(b), 24 CFR 5.2005(b)] HUD rules prohibit denial of program assistance to the program based on any of the following criteria:

• Age, disability, race, color, religion, sex, or national origin (See Chapter 2 for additional

information about fair housing and equal opportunity requirements.)

• Where a family lives prior to admission to the program
• Where the family will live with assistance under the program. Although eligibility is not

affected by where the family will live, there may be restrictions on the family's ability to move outside the PHA's jurisdiction under portability. (See Chapter 10.)

• Whether members of the family are unwed parents, recipients of public assistance, or

children born out of wedlock

• Whether the family includes children
• Whether a family decides to participate in a family self-sufficiency program
• Whether or not a qualified applicant is or has been a victim of domestic violence,

dating violence, sexual assault, stalking, or human trafficking if the applicant is otherwise qualified for assistance (See section 3-III.G.)

3-III.B. MANDATORY DENIAL OF ASSISTANCE [24 CFR 982.553(a) and

24 CFR 982.552(b)(6)] HUD requires the PHA to deny assistance in the following cases:

• Any member of the household has been evicted from federally assisted housing in the last

three years for drug-related criminal activity. HUD permits, but does not require, the PHA to admit an otherwise-eligible family if the household member has completed a PHA-approved drug rehabilitation program or the circumstances which led to eviction no longer exist (e.g., the person involved in the criminal activity no longer lives in the household).

• The PHA determines that any household member is currently engaged in the use of

illegal drugs.

• The PHA has reasonable cause to believe that any household member's current use or pattern

of use of illegal drugs, or current abuse or pattern of abuse of alcohol, may threaten the health, safety, or right to peaceful enjoyment of the premises by other residents.

• Any household member has ever been convicted of drug-related criminal activity for the

production or manufacture of methamphetamine on the premises of federally assisted housing.

• Any household member is subject to a lifetime registration requirement under a state sex

offender registration program.

• Any member of the family fails to sign and submit consent forms for obtaining information.
• The family does not meet the restrictions on net assets and real property ownership as

required by 24 CFR 5.618.

Upon the PHA's HOTMA 102/104 compliance date, the following section on the asset limitation is added. The asset limitation does not apply until the PHA's HOTMA compliance date.

3-III.C. RESTRICTION ON ASSISTANCE BASED ON ASSETS [24 CFR 5.618]

There are two circumstances under which a family is ineligible to receive assistance based on asset ownership. First, assistance may not be provided to any family if the family's net assets exceed the HUD- published asset limitation amount (adjusted annually by HUD).

• This amount is listed in HUD's current year Inflation-Adjusted Values tables
• $100,000 for 2024, $103,200 for 2025

Second, the family has real property (as defined under state law in which the property is located) that is suitable for occupancy by the family as a residence and the family has:

• A present ownership interest in the real property; and
• A legal right to reside in the real property; and

• The effective legal authority to sell (based on state or local laws of the jurisdiction where the

property is located) the real property. The PHA does not have the discretion not to enforce or provide limited enforcement of the asset limitation at admission. However, the real property restriction does not apply in the following circumstances:

• Any property for which the family is receiving assistance for a manufactured home under 24

CFR 982.620 or under the HCV Homeownership program;

• Any property that is jointly owned by a member of the family and at least one non-household

member who does not live with the family, if the non-household member resides at the jointly owned property;

• Any family that is offering the property for sale; or
• Any person who is a victim of domestic violence, dating violence, sexual assault, or stalking.

- When a family asks for an exception because a family member is a victim of domestic violence, dating violence, sexual assault, or stalking, the PHA must comply with all the confidentiality requirements under VAWA. The PHA must accept a self-certification from the family member, and the restrictions on requesting documentation under VAWA apply. A property is considered suitable for occupancy unless the family demonstrates that it:

• Does not meet the disability-related needs for all members of the family (e.g., physical

accessibility requirements, disability-related need for additional bedrooms, proximity to accessible transportation, etc.);

• Is not sufficient for the size of the family;

• Is geographically located so as to be a hardship for the family (e.g., the distance or

commuting time between the property and the family's place of work or school would be a hardship to the family, as determined by the PHA or owner);

• Is not safe to reside in because of the physical condition of the property (e.g., property's

physical condition poses a risk to the family's health and safety and the condition of the property cannot be easily remedied); or

• Is not a property that a family may reside in under the state or local laws of the jurisdiction

where the property is located. If a family meets one of the above exceptions, the real property is not automatically excluded from the calculation of net family assets. Unless the real property is specifically excluded from net family assets as described in 24 CFR 5.603 and Chapter 6 of this policy, it will be included in net family assets. If the value of that real property brings the net family assets above the HUD- published asset limitation amount, the family is out of compliance with the asset limitation. See Chapter 7 for information on verifying net family assets for purposes of the asset limitation.

3-III.D. OTHER PERMITTED REASONS FOR DENIAL OF ASSISTANCE

HUD permits, but does not require, the PHA to deny assistance for the reasons discussed in this section. Criminal Activity [24 CFR 982.553] HUD permits, but does not require, the PHA to deny assistance if the PHA determines that any household member is currently engaged in, or has engaged in during a reasonable time before the family would receive assistance, certain types of criminal activity.

Evidence of such criminal activity includes, but is not limited to: Any conviction for drug-related or violent criminal activity within the past five years.

Records of arrests for drug-related or violent criminal activity within the past five years, although a record or records of arrest will not be used as the sole basis for the denial or proof that the applicant engaged in disqualifying criminal activity. In making its decision to deny assistance, the Authority will consider the factors discussed in Section 3-III.F and 3-III.G. Upon consideration of such factors, the Authority may, on a case-by-case basis, decide not to deny assistance. Previous Behavior in Assisted Housing [24 CFR 982.552(c)] HUD authorizes the PHA to deny assistance based on the family's previous behavior in assisted housing. PHAs are not permitted to deny assistance to a family because the family previously failed to meet its obligations under the Family Self-Sufficiency (FSS) program [24 CFR 984.101(d)].

A family member has engaged in or threatened violent or abusive behavior toward Authority personnel. Abusive or violent behavior towards Authority personnel includes verbal as well as physical abuse or violence. Use of racial epithets, or other language, written or oral, that is customarily used to intimidate may be considered abusive or violent behavior. Threatening refers to oral or written threats or physical gestures that communicate intent to abuse or commit violence. In making its decision to deny assistance, the Authority will consider the factors discussed in Section 3-III.F and 3-III.G. Upon consideration of such factors, the Authority may, on a case-by-case basis, decide not to deny assistance.

3-III.E. SCREENING

Screening for Eligibility PHAs are authorized to obtain criminal conviction records from law enforcement agencies to screen applicants for admission to the HCV program. This authority assists the PHA in complying with HUD requirements and PHA policies to deny assistance to applicants who are engaging in or have engaged in certain criminal activities. In order to obtain access to the records the PHA must require every applicant family to submit a consent form signed by each adult household member [24 CFR 5.903].

If the PHA proposes to deny assistance based on a criminal record or on lifetime sex offender registration information, the PHA must notify the household of the proposed action and must provide the subject of the record and the applicant a copy of the record and an opportunity to dispute the accuracy and relevance of the information prior to a denial of admission. [24 CFR 5.903(f) and 5.905(d)].

Screening for Suitability as a Tenant [24 CFR 982.307] The PHA has no liability or responsibility to the owner for the family's behavior or suitability for tenancy. The PHA has the authority to conduct additional screening to determine whether an applicant is likely to be a suitable tenant.

3-III.F. CRITERIA FOR DECIDING TO DENY ASSISTANCE

Evidence [24 CFR 982.553(c)]

Consideration of Circumstances [24 CFR 982.552(c)(2)] HUD authorizes the PHA to consider all relevant circumstances when deciding whether to deny assistance based on a family's past history except in the situations for which denial of assistance is mandatory (see Section 3-III.B).

Removal of a Family Member's Name from the Application Should the PHA's screening process reveal that an applicant's household includes an individual subject to state lifetime registered sex offender registration, the PHA must offer the family the opportunity to remove the ineligible family member from the household. If the family is unwilling to remove that individual from the household, the PHA must deny admission to the family [Notice PIH 2012-28]. For other criminal activity, the PHA may permit the family to exclude the culpable family members as a condition of eligibility. [24 CFR 982.552(c)(2)(ii)].

3-III.G. NOTICE OF ELIGIBILITY OR DENIAL

If the family is eligible for assistance, the PHA will notify the family in writing and schedule an applicant briefing, as discussed in Chapter 5. If the PHA determines that a family is not eligible for the program for any reason, the family must be notified promptly. The notice must describe: (1) the reasons for which assistance has been denied, (2) the family's right to an informal review, and (3) the process for obtaining the informal review [24 CFR 982.554 (a)]. See Chapter 16, for informal review policies and procedures.

If a PHA uses a criminal record or sex offender registration information obtained under 24 CFR 5, Subpart J, as the basis of a denial, a copy of the record must precede the notice to deny, with an opportunity for the applicant to dispute the accuracy and relevance of the information before the PHA can move to deny the application. In addition, a copy of the record must be provided to the subject of the record [24 CFR 5.903(f) and 5.905(d)]. The PHA must give the family an opportunity to dispute the accuracy and relevance of that record, in the informal review process in accordance with program requirements [24 CFR 982.553(d)].

3-III.H. PROHIBITION AGAINST DENIAL OF ASSISTANCE TO VICTIMS OF

DOMESTIC VIOLENCE, DATING VIOLENCE, SEXUAL ASSAULT, STALKING, AND HUMAN TRAFFICKING The Violence against Women Act (VAWA) and the HUD regulation at 24 CFR 5.2005(b) prohibit PHAs from denying an applicant admission to the HCV program on the basis or as a direct result of the fact that the applicant is or has been a victim of domestic violence, dating violence, sexual assault, or stalking, if the applicant otherwise qualifies for assistance or admission.

• Although the VAWA 2022 statute does not specifically include human trafficking in the list

of victims protected under VAWA, in 2022 HUD began including human trafficking as part of the list of victims protected under VAWA (as seen in Notices PIH 2022-06, PIH 2022-22, and PIH 2022-24). In the absence of a final rule implementing VAWA 2022 and to mirror HUD's recent usage, this policy includes human trafficking in addition to domestic violence, dating violence, sexual assault, and stalking anywhere such a list appears. Definitions of key terms used in VAWA are provided in section 16-IX of this plan, where general VAWA requirements and policies pertaining to notification, documentation, and confidentiality are also located. Notification VAWA requires PHAs to provide applicants who are denied assistance with a VAWA Notice of Occupancy Rights (form HUD–5380) and a domestic violence certification form (HUD-5382) at the time the applicant is denied.

EXHIBIT 3-1: DETAILED DEFINITIONS RELATED TO DISABILITIES Person with Disabilities [24 CFR 5.403] The term person with disabilities means a person who has any of the following types of conditions:

• Has a disability, as defined in 42 U.S.C. Section 423(d)(1)(A), which reads:

Inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months; or In the case of an individual who has attained the age of 55 and is blind (within the meaning of "blindness" as defined in section 416(i)(1) of this title), inability by reason of such blindness to engage in substantial gainful activity, requiring skills or ability comparable to those of any gainful activity in which he has previously engaged with some regularity and over a substantial period of time.

• Has a developmental disability as defined in the Developmental Disabilities Assistance and

Bill of Rights Act of 2000 [42 U.S.C.15002(8)], which defines developmental disability in functional terms as follows: (A) In General The term "developmental disability" means a severe, chronic disability of an individual that: (i) is attributable to a mental or physical impairment or combination of mental and physical impairments; (ii) is manifested before the individual attains age 22; (iii) is likely to continue indefinitely; (iv) results in substantial functional limitations in 3 or more of the following areas of major life activity: (I) Self-care, (II) Receptive and expressive language, (III) Learning, (IV) Mobility, (V) Self-direction, (VI) Capacity for independent living, (VII) Economic self-sufficiency; and (v) reflects the individual's need for a combination and sequence of special, interdisciplinary, or generic services, individualized supports, or other forms of assistance that are of lifelong or extended duration and are individually planned and coordinated.

(B) Infants and Young Children An individual from birth to age 9, inclusive, who has a substantial developmental delay or specific congenital or acquired condition, may be considered to have a developmental disability without meeting 3 or more of the criteria described in clauses (i) through (v) of subparagraph (A) if the individual, without services and supports, has a high probability of meeting those criteria later in life.

• Has a physical, mental, or emotional impairment that is expected to be of long-continued and

indefinite duration; substantially impedes their ability to live independently, and is of such a nature that the ability to live independently could be improved by more suitable housing conditions. People with the acquired immunodeficiency syndrome (AIDS) or any conditions arising from the etiologic agent for AIDS are not excluded from this definition. A person whose disability is based solely on any drug or alcohol dependence does not qualify as a person with disabilities for the purposes of this program. For purposes of reasonable accommodation and program accessibility for persons with disabilities, the term person with disabilities refers to an individual with handicaps. Individual with Handicaps [24 CFR 8.3] Individual with handicaps means any person who has a physical or mental impairment that substantially limits one or more major life activities; has a record of such an impairment; or is regarded as having such an impairment. The term does not include any individual who is an alcoholic or drug abuser whose current use of alcohol or drugs prevents the individual from participating in the program or activity in question, or whose participation, by reason of such current alcohol or drug abuse, would constitute a direct threat to property or the safety of others. As used in this definition, the phrase: (1) Physical or mental impairment includes: (a) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genito-urinary; hemic and lymphatic; skin; and endocrine; or (b) Any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities. The term physical or mental impairment includes, but is not limited to, such diseases and conditions as orthopedic, visual, speech and hearing impairments, cerebral palsy, autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, mental retardation, emotional illness, drug addiction and alcoholism. (2) Major life activities means functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working. (3) Has a record of such an impairment means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities.

(4) Is regarded as having an impairment means: (a) Has a physical or mental impairment that does not substantially limit one or more major life activities but that is treated by a recipient as constituting such a limitation; (b) Has a physical or mental impairment that substantially limits one or more major life activities only as a result of the attitudes of others toward such impairment; or (c) Has none of the impairments defined in paragraph (1) of this section but is treated by a recipient as having such an impairment.

EXHIBIT 3-2: DEFINITION OF INSTITUTION OF HIGHER EDUCATION [20 U.S.C. 1001 and 1002] 1937; Supplementary Guidance; Notice [Federal Register, April 10, 2006] Institution of Higher Education shall have the meaning given this term in the Higher Education Act of 1965 in 20 U.S.C. 1001 and 1002. Definition of ''Institution of Higher Education'' From 20 U.S.C. 1001 (a) Institution of higher education. For purposes of this chapter, other than subchapter IV and part C of subchapter I of chapter 34 of Title 42, the term ''institution of higher education'' means an educational institution in any State that (1) Admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate; (2) Is legally authorized within such State to provide a program of education beyond secondary education; (3) Provides an educational program for which the institution awards a bachelor's degree or provides not less than a 2-year program that is acceptable for full credit toward such a degree; (4) Is a public or other nonprofit institution; and (5) Is accredited by a nationally recognized accrediting agency or association, or if not so accredited, is an institution that has been granted preaccreditation status by such an agency or association that has been recognized by the Secretary for the granting of preaccreditation status, and the Secretary has determined that there is satisfactory assurance that the institution will meet the accreditation standards of such an agency or association within a reasonable time. (b) Additional institutions included. For purposes of this chapter, other than subchapter IV and part C of subchapter I of chapter 34 of Title 42, the term ''institution of higher education'' also includes— (1) Any school that provides not less than a 1-year program of training to prepare students for gainful employment in a recognized occupation and that meets the provision of paragraphs (1), (2), (4), and (5) of subsection (a) of this section; and (2) A public or nonprofit private educational institution in any State that, in lieu of the requirement in subsection (a)(1) of this section, admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located. (c) List of accrediting agencies. For purposes of this section and section 1002 of this title, the Secretary shall publish a list of nationally recognized accrediting agencies or associations that the Secretary determines, pursuant to subpart 2 of part G of subchapter IV of this chapter, to be reliable authority as to the quality of the education or training offered.

Definition of ''Institution of Higher Education'' From 20 U.S.C. 1002 (a) Definition of institution of higher education for purposes of student assistance programs (1) Inclusion of additional institutions. Subject to paragraphs (2) through (4) of this subsection, the term ''institution of higher education'' for purposes of subchapter IV of this chapter and part C of subchapter I of chapter 34 of title 42 includes, in addition to the institutions covered by the definition in section 1001 of this title— (A) A proprietary institution of higher education (as defined in subsection (b) of this section); (B) A postsecondary vocational institution (as defined in subsection (c) of this section); and (C) Only for the purposes of part B of subchapter IV of this chapter, an institution outside the United States that is comparable to an institution of higher education as defined in section 1001 of this title and that has been approved by the Secretary for the purpose of part B of subchapter IV of this chapter. (2) Institutions outside the United States (A) In general. For the purpose of qualifying as an institution under paragraph (1)(C), the Secretary shall establish criteria by regulation for the approval of institutions outside the United States and for the determination that such institutions are comparable to an institution of higher education as defined in section 1001 of this title (except that a graduate medical school, or a veterinary school, located outside the United States shall not be required to meet the requirements of section 1001 (a)(4) of this title). Such criteria shall include a requirement that a student attending such school outside the United States is ineligible for loans made, insured, or guaranteed under part B of subchapter IV of this chapter unless— (i) In the case of a graduate medical school located outside the United States— (I)(aa) At least 60 percent of those enrolled in, and at least 60 percent of the graduates of, the graduate medical school outside the United States were not persons described in section 1091(a)(5) of this title in the year preceding the year for which a student is seeking a loan under part B of subchapter IV of this chapter; and (bb) At least 60 percent of the individuals who were students or graduates of the graduate medical school outside the United States or Canada (both nationals of the United States and others) taking the examinations administered by the Educational Commission for Foreign Medical Graduates received a passing score in the year preceding the year for which a student is seeking a loan under part B of subchapter IV of this chapter; or (II) The institution has a clinical training program that was approved by a State as of January 1, 1992; or

(ii) In the case of a veterinary school located outside the United States that does not meet the requirements of section 1001(a)(4) of this title, the institution's students complete their clinical training at an approved veterinary school located in the United States. (B) Advisory panel (i) In general. For the purpose of qualifying as an institution under paragraph (1)(C) of this subsection, the Secretary shall establish an advisory panel of medical experts that shall— (I) Evaluate the standards of accreditation applied to applicant foreign medical schools; and (II) Determine the comparability of those standards to standards for accreditation applied to United States medical schools. (ii) Special rule if the accreditation standards described in clause (i) are determined not to be comparable, the foreign medical school shall be required to meet the requirements of section 1001 of this title. (C) Failure to release information. The failure of an institution outside the United States to provide, release, or authorize release to the Secretary of such information as may be required by subparagraph (A) shall render such institution ineligible for the purpose of part B of subchapter IV of this chapter. (D) Special rule. If, pursuant to this paragraph, an institution loses eligibility to participate in the programs under subchapter IV of this chapter and part C of subchapter I of chapter 34 of title 42, then a student enrolled at such institution may, notwithstanding such loss of eligibility, continue to be eligible to receive a loan under part B while attending such institution for the academic year succeeding the academic year in which such loss of eligibility occurred. (3) Limitations based on course of study or enrollment. An institution shall not be considered to meet the definition of an institution of higher education in paragraph (1) if such institution— (A) Offers more than 50 percent of such institution's courses by correspondence, unless the institution is an institution that meets the definition in section 2471 (4)(C) of this title; (B) Enrolls 50 percent or more of the institution's students in correspondence courses, unless the institution is an institution that meets the definition in such section, except that the Secretary, at the request of such institution, may waive the applicability of this subparagraph to such institution for good cause, as determined by the Secretary in the case of an institution of higher education that provides a 2-or 4-year program of instruction (or both) for which the institution awards an associate or baccalaureate degree, respectively;

(C) Has a student enrollment in which more than 25 percent of the students are incarcerated, except that the Secretary may waive the limitation contained in this subparagraph for a nonprofit institution that provides a 2-or 4-year program of instruction (or both) for which the institution awards a bachelor's degree, or an associate's degree or a postsecondary diploma, respectively; or (D) Has a student enrollment in which more than 50 percent of the students do not have a secondary school diploma or its recognized equivalent, and does not provide a 2-or 4- year program of instruction (or both) for which the institution awards a bachelor's degree or an associate's degree, respectively, except that the Secretary may waive the limitation contained in this subparagraph if a nonprofit institution demonstrates to the satisfaction of the Secretary that the institution exceeds such limitation because the institution serves, through contracts with Federal, State, or local government agencies, significant numbers of students who do not have a secondary school diploma or its recognized equivalent. (4) Limitations based on management. An institution shall not be considered to meet the definition of an institution of higher education in paragraph (1) if— (A) The institution, or an affiliate of the institution that has the power, by contract or ownership interest, to direct or cause the direction of the management or policies of the institution, has filed for bankruptcy, except that this paragraph shall not apply to a nonprofit institution, the primary function of which is to provide health care educational services (or an affiliate of such an institution that has the power, by contract or ownership interest, to direct or cause the direction of the institution's management or policies) that files for bankruptcy under chapter 11 of title 11 between July 1, 1998, and December 1, 1998; or (B) The institution, the institution's owner, or the institution's chief executive officer has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of funds under subchapter IV of this chapter and part C of subchapter I of chapter 34 of title 42, or has been judicially determined to have committed fraud involving funds under subchapter IV of this chapter and part C of subchapter I of chapter 34 of title 42. (5) Certification. The Secretary shall certify an institution's qualification as an institution of higher education in accordance with the requirements of subpart 3 of part G of subchapter IV of this chapter. (6) Loss of eligibility. An institution of higher education shall not be considered to meet the definition of an institution of higher education in paragraph (1) if such institution is removed from eligibility for funds under subchapter IV of this chapter and part C of subchapter I of chapter 34 of title 42 as a result of an action pursuant to part G of subchapter IV of this chapter.

(b) Proprietary institution of higher education (1) Principal criteria. For the purpose of this section, the term ''proprietary institution of higher education'' means a school that— (A) Provides an eligible program of training to prepare students for gainful employment in a recognized occupation; (B) Meets the requirements of paragraphs (1) and (2) of section 1001 (a) of this title; (C) Does not meet the requirement of paragraph (4) of section 1001 (a) of this title; (D) Is accredited by a nationally recognized accrediting agency or association recognized by the Secretary pursuant to part G of subchapter IV of this chapter; (E) Has been in existence for at least 2 years; and (F) Has at least 10 percent of the school's revenues from sources that are not derived from funds provided under subchapter IV of this chapter and part C of subchapter I of chapter 34 of title 42, as determined in accordance with regulations prescribed by the Secretary. (2) Additional institutions. The term ''proprietary institution of higher education'' also includes a proprietary educational institution in any State that, in lieu of the requirement in paragraph (1) of section 1001 (a) of this title, admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located. (c) Postsecondary vocational institution. (1) Principal criteria. For the purpose of this section, the term ''postsecondary vocational institution'' means a school that— (A) Provides an eligible program of training to prepare students for gainful employment in a recognized occupation; (B) Meets the requirements of paragraphs (1), (2), (4), and (5) of section 1001 (a) of this title; and (C) Has been in existence for at least 2 years. (2) Additional institutions. The term ''postsecondary vocational institution'' also includes an educational institution in any State that, in lieu of the requirement in paragraph (1) of section 1001 (a) of this title, admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located.

APPLICATIONS, WAITING LIST AND TENANT SELECTION

INTRODUCTION When a family wishes to receive assistance under the HCV program, the family must submit an application that provides the PHA with the information needed to determine the family's eligibility. HUD requires the PHA to place all families that apply for assistance on a waiting list. When HCV assistance becomes available, the PHA must select families from the waiting list in accordance with HUD requirements and PHA policies as stated in the administrative plan and the annual plan. The PHA is required to adopt clear policies and procedures for accepting applications, placing families on the waiting list, and selecting families from the waiting list, and must follow these policies and procedures consistently. The actual order in which families are selected from the waiting list can be affected if a family has certain characteristics designated by HUD or the PHA that justify their selection. Examples of this are the selection of families for income targeting and the selection of families that qualify for targeted funding. HUD regulations require that all families have an equal opportunity to apply for and receive housing assistance, and that the PHA affirmatively further fair housing goals in the administration of the program [24 CFR 982.53, HCV GB p. 4-1]. Adherence to the selection policies described in this chapter ensures that the PHA will be in compliance with all relevant fair housing requirements, as described in Chapter 2. This chapter describes HUD and PHA policies for taking applications, managing the waiting list and selecting families for HCV assistance. The policies outlined in this chapter are organized into three sections, as follows: Part I: The Application Process. This part provides an overview of the application process, and discusses how applicants can obtain and submit applications. It also specifies how the PHA will handle the applications it receives. Part II: Managing the Waiting List. This part presents the policies that govern how the PHA's waiting list is structured, when it is opened and closed, and how the public is notified of the opportunity to apply for assistance. It also discusses the process the PHA will use to keep the waiting list current. Part III: Selection for HCV Assistance. This part describes the policies that guide the PHA in selecting families for HCV assistance as such assistance becomes available. It also specifies how in-person interviews will be used to ensure that the PHA has the information needed to make a final eligibility determination.

Part I: The Application Process

4-I.A. OVERVIEW

This part describes the PHA policies for making applications available, accepting applications making preliminary determinations of eligibility, and the placement of applicants on the waiting list. This part also describes the PHA's obligation to ensure the accessibility of the application process to elderly persons, people with disabilities, and people with limited English proficiency (LEP).

4-I.B. APPLYING FOR ASSISTANCE [HCV GB, pp. 4-11 – 4-16, Notice PIH 2009-36]

Any family that wishes to receive HCV assistance must apply for admission to the program. HUD permits the PHA to determine the format and content of HCV applications, as well how such applications will be made available to interested families and how applications will be accepted by the PHA. The PHA must include Form HUD-92006, Supplement to Application for Federally Assisted Housing, as part of the PHA's application.

The purpose of pre-application is to permit the Authority to gather information and determine placement on the waiting list. The pre-application will contain questions designed to obtain pertinent applicant information.

Applicants who wish to apply for any one of the Authority's programs must complete an online pre-application when the waiting list is open. Pre-applications will be made available in an accessible format upon request from a person with a disability.

The pre-application process will involve two phases. The first is the "initial" pre- application for housing assistance (referred to as a pre-application). This first phase results in the applicant's placement on the waiting list. The pre-application will be electronically dated, timestamped. The Authority will maintain a database until applicant name is selected from the waiting list.

The second phase is the "final determination of eligibility" (referred to as the full application). The full application takes place when the applicant is selected from the waiting list. At this time the Authority ensures that the applicants are eligible and suitability requirement is met.

The pre-application may be cancelled if the Authority receives an incomplete pre- application or an undeliverable correspondence. The Authority is permitted by HUD to

determine the format and content of pre-applications. For the purpose of establishing a waiting list, pre-applications will be accepted from any applicant wishing to apply for HCV. The Authority may select one or more of the following methods for pre- applications:

1. Online 2. By mail 3. Submitted in person 4. By phone 5. By other method as described in the public announcement

4-I.C. Accessibility Of The Application Process

Elderly and Disabled Populations [24 CFR 8 and HCV GB, pp. 4-11 – 4-13] The PHA must take steps to ensure that the application process is accessible to those people who might have difficulty complying with the normal, standard PHA application process. This could include people with disabilities, certain elderly individuals, as well as persons with limited English proficiency (LEP). The PHA must provide reasonable accommodation to the needs of individuals with disabilities. The application-taking facility and the application process must be fully accessible, or the PHA must provide an alternate approach that provides full access to the application process. Chapter 2 provides a full discussion of the PHA's policies related to providing reasonable accommodations for people with disabilities. Limited English Proficiency PHAs are required to take reasonable steps to ensure equal access to their programs and activities by persons with limited English proficiency [24 CFR 1]. Chapter 2 provides a full discussion on the PHA's policies related to ensuring access to people with limited English proficiency (LEP).

4-I.D. PLACEMENT ON THE WAITING LIST

The PHA must review each complete application received and make a preliminary assessment of the family's eligibility. The PHA must accept applications from families for whom the list is open unless there is good cause for not accepting the application (such as denial of assistance) for the grounds stated in the regulations [24 CFR 982.206(b)(2)]. Where the family is determined to be ineligible, the PHA must notify the family in writing [24 CFR 982.201(f)]. Where the family is not determined to be ineligible, the family will be placed on a waiting list of applicants. No applicant has a right or entitlement to be listed on the waiting list, or to any particular position on the waiting list [24 CFR 982.202(c)]. Ineligible for Placement on the Waiting List

Placement on the waiting list does not indicate that the applicant is, in fact, eligible for admission. A final determination of eligibility and qualification for preferences will be made when the applicant is selected from the waiting list.

Applicants will be placed on the waiting list according to Authority preference(s), the date and time, and the completed pre-application is received by the Authority.

Part Ii: Managing The Waiting List

4-II.A. OVERVIEW

The PHA must have policies regarding various aspects of organizing and managing the waiting list of applicant families. This includes opening the list to new applicants, closing the list to new applicants, notifying the public of waiting list openings and closings, updating waiting list information, purging the list of families that are no longer interested in or eligible for assistance, as well as conducting outreach to ensure a sufficient number of applicants. In addition, HUD imposes requirements on how a PHA may structure its waiting list and how families must be treated if they apply for assistance from a PHA that administers more than one assisted housing program.

4-II.B. ORGANIZATION OF THE WAITING LIST [24 CFR 982.204 and 205]

The PHA's HCV waiting list must be organized in such a manner to allow the PHA to accurately identify and select families for assistance in the proper order, according to the admissions policies described in this plan. The waiting list must contain the following information for each applicant listed:

• Applicant name;
• Family unit size;
• Annual income;
• Date and time of application;
• Admission preference, if any;
• Racial or ethnic designation of the head of household.

HUD requires the PHA to maintain a single waiting list for the HCV program unless it serves more than one county or municipality. Such PHAs are permitted, but not required, to maintain a separate waiting list for each county or municipality served.

4-II.C. OPENING AND CLOSING THE WAITING LIST [24 CFR 982.206]

Closing the Waiting List A PHA is permitted to close the waiting list if it has an adequate pool of families to use its available HCV assistance. Alternatively, the PHA may elect to continue to accept applications only from certain categories of families that meet particular preferences or funding criteria.

The Authority may announce the closing of the waiting list by public notice same method as opening. The Authority will give at least ten (10) business day notice prior to closing the list. When the period for accepting pre-applications is over, the Authority will add the new applicants to the wait list by:

• Sorting the new applicants into groups based on preferences and ranking

applicants within each group by date and time of application. Reopening the Waiting List If the waiting list has been closed, it cannot be reopened until the PHA publishes a notice in local newspapers of general circulation, minority media, and other suitable media outlets. The notice must comply with HUD fair housing requirements and must specify who may apply, and where and when applications will be received.

• Date and time the waiting list(s) will open (begin accepting preapplications) for a

wait list;

• Housing program(s) for which preapplications will be accepted;
• Brief description of the housing program;
• Limitations, if any, on who may apply;
• Method by which preapplications will be accepted;
• Date and time the waiting list(s) will close (Authority will cease accepting

preapplications).

4-II.D. FAMILY OUTREACH [HCV GB, pp. 4-2 to 4-4]

The PHA must conduct outreach as necessary to ensure that the PHA has a sufficient number of applicants on the waiting list to use the HCV resources it has been allotted. Because HUD requires the PHA to admit a specified percentage of extremely low-income families to the program (see Chapter 4, Part III), the PHA may need to conduct special outreach to ensure that an adequate number of such families apply for assistance [HCV GB, p. 4-20 to 4-21]. PHA outreach efforts must comply with fair housing requirements. This includes:

• Analyzing the housing market area and the populations currently being served to identify

underserved populations

• Ensuring that outreach efforts are targeted to media outlets that reach eligible populations

that are underrepresented in the program

• Avoiding outreach efforts that prefer or exclude people who are members of a protected class

PHA outreach efforts must be designed to inform qualified families about the availability of assistance under the program. These efforts may include, as needed, any of the following activities:

• Submitting press releases to local newspapers, including minority newspapers
• Developing informational materials and flyers to distribute to other agencies
• Providing application forms to other public and private agencies that serve the low income

population

• Developing partnerships with other organizations that serve similar populations, including

agencies that provide services for persons with disabilities

4-II.E. REPORTING CHANGES IN FAMILY CIRCUMSTANCES

4-II.F. UPDATING THE WAITING LIST [24 CFR 982.204]

HUD requires the PHA to establish policies to use when removing applicant names from the waiting list. Purging the Waiting List The decision to withdraw an applicant family that includes a person with disabilities from the waiting list is subject to reasonable accommodation. If the applicant did not respond to a PHA request for information or updates, and the PHA determines that the family did not respond because of the family member's disability, the PHA must reinstate the applicant family to their former position on the waiting list [24 CFR 982.204(c)(2)].

Any written notification to the applicant, which require a response, will state that failure to respond within ten (10) business days will result in the applicant's name being removed from the waiting list. An extension of thirty (30) days to respond will be granted, if requested and needed as a reasonable accommodation for a person with a disability. See Chapter 2-Fair Housing and Equal Opportunity for further information regarding reasonable accommodations.

If a letter is returned by the Post Office without a forwarding address or is deemed undelivered via email through the Applicant Portal, the applicant will be removed from the waiting list without further notice, and the envelope with letter or email notification will be maintained in the file. If a letter is returned with a forwarding address, the Authority will make no more than one (1) attempt to forward the letter to the new forwarding address before removing the applicant from the waiting list(s).

If an applicant is removed from the waiting list for failure to respond, they will not be entitled to reinstatement unless the Director of Housing Programs or his/her designee determines there were circumstances beyond the person's control, such as if it is

determined that the lack of response was due to Authority error, or to circumstances beyond the family's control, as a result of a family member's disability, or as a direct result of status as a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking, including an adverse factor resulting from such abuse.

Removal from the Waiting List

Failure to respond or provide to a request for information from the Authority is grounds to cancel the preapplication. A request for an informal review will not be provided without the approval from the Director of Housing Programs or her/his designee.

Failure to attend scheduled appointment(s) will be cause to remove the preapplication.

If the Authority determines that the applicant is not eligible for admission (see Chapter 3- removed from the waiting list. If a family is removed from the waiting list because the Authority has determined the family is not eligible for assistance, a notice will be sent to the family's address of record as well as to any alternate address provided on the initial application. The notice will state the reasons the family was removed from the waiting list and will inform the family how to request an informal review regarding the Authority's decision (see Chapter 16) [24 CFR 982.201(f)].

Part Iii: Selection For Hcv Assistance

4-III.A. OVERVIEW

As vouchers become available, families on the waiting list must be selected for assistance in accordance with the policies described in this part. The order in which families are selected from the waiting list depends on the selection method chosen by the PHA and is impacted in part by any selection preferences for which the family qualifies. The availability of targeted funding also may affect the order in which families are selected from the waiting list. The PHA must maintain a clear record of all information required to verify that the family is selected from the waiting list according to the PHA's selection policies [24 CFR 982.204(b) and 982.207(e)].

4-III.B. SELECTION AND HCV FUNDING SOURCES

Special Admissions [24 CFR 982.203] HUD may award funding for specifically-named families living in specified types of units (e.g., a family that is displaced by demolition of public housing; a non-purchasing family residing in a HOPE 1 or 2 projects). In these cases, the PHA may admit such families whether or not they are on the waiting list, and, if they are on the waiting list, without considering the family's position on the waiting list. These families are considered non-waiting list selections. The PHA must maintain records showing that such families were admitted with special program funding. Targeted Funding [24 CFR 982.204(e)] HUD may award a PHA funding for a specified category of families on the waiting list. The PHA must use this funding only to assist the families within the specified category. In order to assist families within a targeted funding category, the PHA may skip families that do not qualify within the targeted funding category. Within this category of families, the order in which such families are assisted is determined according to the policies provided in Section 4-III.C.

• Family Unification Program (FUP)

o FUP is designed to re-unite families that because of the lack of decent, safe and affordable housing have caused a separation of the family members, or the separation is imminent. The program is administered through the Human Services Agency (HSA). Referrals to the Authority are submitted by HSA.

• Allocation 27 vouchers, subject to change.
• HUD Veteran's Affairs Supportive Housing Program (VASH)

o VASH's may be issued by the Veteran's Affair referral agency whom has determined is eligible for an VASH referral (based on qualifying definition for VASH assistance)

• Allocation 123 vouchers, subject to change.
• Emergency Housing Voucher Program (EHV)

o EHV's may be issued to families by the CoC or other partner referral agency whom the CoC has determined is eligible for an EHV referral (based on qualifying definition for EHV assistance for homelessness or another eligible category as applicable).

• Allocation 68 vouchers, subject to change.
• Mainstream Voucher Program (MS5)

o Non-elderly disabled person at risk of homelessness or homeless. A person 18 years of age or older and less than 62 (18-61) years who is a family composed of one or more non-elderly persons with disabilities, which may include additional members who are not non-elderly persons with disabilities who are:

• Transitioning out of institutional and other segregated settings;
• At risk of institutionalization;
• At risk of experiencing homelessness or homeless

 Allocation 28 vouchers, subject to change. Regular HCV Funding Regular HCV funding may be used to assist any eligible family on the waiting list. Families are selected from the waiting list according to the policies provided in Section 4-III.C.

The Authority may, at its discretion, set-aside vouchers from its HCV Tenant-Based voucher allocation, when funding and availability permit, to be used to assist individuals or families in Merced County who are:

Participating in a Supportive Housing Program within the County of Merced, or Emergency Solutions Grants program; or by a partnering homeless service organization that is a member of the Merced County Continuum of Care's centralized/coordinated assessment system;

These transitional housing applications may be accepted even when the waiting list is closed. An individual or family who lacks a fixed, regular and adequate nighttime residence meaning;

(A) individual or family living in a supervised publicly or privately-operated shelter designated to provide temporary living arrangements (including congregate shelters, transitional housing, and hotels and motels paid for by charitable organizations or by federal, state or local government programs for low-income individuals);

(B) An individual who is exiting an institution where he or she resided for 90 days or less and who resided in an emergency shelter or place not meant for human habitation immediately before entering that audition;

• Any individual or family who is attempting to flee, domestic violence, dating

violence, sexual assault, stalking, or other dangerous or life-threatening conditions that relate to violence against the individual or a family member, including a child, that has either taken place within the individual's or family's primary nighttime residence or has made the individual or family afraid to return to their primary nighttime residence; and

• Has no other residence; and
• Lacks the resources or support networks, e.g. family, friend, and faith-based or

other social networks, to obtain other permanent housing.

Independent Living Skills Program (ILSP): The Authority may designate vouchers, when funding permits for foster youth/young adults transitioning from foster care and who lack adequate housing or are at risk for homelessness. Referred by Merced County Human Services Agency (HSA). Allocation 10 vouchers, subject to change.

Adult Protective Services Program (APS): The Authority may designate vouchers, when funding permits, for elderly and dependent adults referred by Merced County Human Services APS who are experiencing abuse and/or neglect. Allocation 25 vouchers, subject to change.

Shelter Plus Care (SPC): The Authority designated 8 S+C vouchers for eligible applicants who are homeless and are seriously mentally ill, have chronic problems with drugs and /or alcohol, or have AIDS and related diseases. Referred by Merced County Behavioral Health and Services (BHRS).

Coordinated Entry System (CES): The Authority may designate vouchers, when funding permits, for an individual or family who lacks a fixed, regular and adequate nighttime resident or is fleeing, or is attempting to flee, domestic violence, dating violence, sexual assault, stalking, or other dangerous or life- threatening conditions that relate to violence against the individual or a family member, including a child, that has either taken place within the individual's or family's primary nighttime residence or has made the individual or family afraid to return to their primary nighttime residence; and, has no other residence; and lacks the resources or support networks to obtain other permanent housing referred by partnering homeless service organization that is a member of the Merced County Continuum of Care's CES (centralized/coordinated assessment system). Allocation 235 vouchers, subject to change.

Human Services Agency Housing Support Program (HSP): The Authority may designate vouchers, when funding permits, for an individual or family referred by Merced County Human Services Agency (HSA) who are receiving temporary housing assistance through HSA but are at risk for homelessness. Allocation 50 vouchers, subject to change.

4-III.C. SELECTION METHOD

PHAs must describe the method for selecting applicant families from the waiting list, including the system of admission preferences that the PHA will use [24 CFR 982.202(d)].

Local Preferences [24 CFR 982.207; HCV p. 4-16] PHAs are permitted to establish local preferences, and to give priority to serving families that meet those criteria. HUD specifically authorizes and places restrictions on certain types of local preferences. HUD also permits the PHA to establish other local preferences, at its discretion. Any local preferences established must be consistent with the PHA plan and the consolidated plan, and must be based on local housing needs and priorities that can be documented by generally accepted data sources.

• Insufficient funding (210 points) - families that has been terminated from its

HCV program due to insufficient program funding.

• VAWA (205 points) – for existing Authority families participating in any of the

Authority rental assistance programs that include victims of domestic violence, dating violence, sexual assault, stalking, or human trafficking who have either been referred by a partnering service agency or consortia or are seeking an emergency transfer under VAWA from the Authority's public housing program or other covered housing program operated by the Authority. The Authority will work with the following partnering service agencies: o Valley Crisis Center

• EHV cessation of program (200 points) – for currently assisted EHV families

previously deemed eligible for EHV during the EHV funding period, but whose assistance is at risk of termination due to lack of program funding and EHV vouchers will not be reissued.

• Veteran (14 points) - Current members of the military, veterans, or surviving

spouses of veterans may qualify for this preference. Applicants must provide proof of honorable discharge. If discharge is less than honorable, applicant must provide proof of eligibility to receive veteran benefits.

• Residency (15 points) - Families who live, work, or have been hired to work

within Merced County and/or residents moving to Merced County who currently participate in an education or training program designed to prepare the individual for the job market at time of selection from the waiting list. Applicants who are working or who have been notified that they are hired to work in a residency preference area must be treated as residents of the residency preference area. HUD regulations state that a residency preference must not be based on how long an applicant has resided or worked in a residency preference area

• Mainstream (12 points) - Non-elderly disabled person at risk of homelessness or

homeless. A person 18 years of age or older and less than 62 (18-61) years who is a family composed of one or more non-elderly persons with disabilities, which may include additional members who are not non-elderly persons with disabilities who are:

• Transitioning out of institutional and other segregated settings;
• At risk of institutionalization;
• At risk of experiencing homelessness or homeless.
• Elderly or Disabled Person (10 points) - An elderly preference applies if the head,

spouse or co-head are a person who is age 62 or older. A disabled person preference applies if the head, spouse or co-head receives Social Security or Supplemental Security benefits or otherwise meets the definition of disabled as defined under Section 223 of the Social Security Act.

• Involuntarily Displaced (10 points) - Families who have been displaced due to a

locally declared disaster, state declared disaster, federally declared disaster or other national emergency. It will also be given to those families that are involuntarily displaced by Authority action (emergency relocation, extensive rehabilitation and insufficient funding or other local disasters) as approved by the Executive Director. Must be able to verify displacement occurred within the last six (6) months from date of wait list selection. New applicants to the Program must be a family displaced by a natural disaster, including disasters recognized by the Federal government, which extensively damaged or destroyed their dwelling or: 1. Is dilapidated as cited by city/county officials of a local code enforcement office and does not provide safe, adequate shelter, has one or more critical defects or a combination of defects requiring considerable repair or endangers the health, safety, and well-being of the family. 2. Has been declared unfit for habitation by a government agency. The Authority will first assist families that have been terminated from the HCV program due to insufficient funding and then assist families that qualify for the VAWA preference.

Income Targeting Requirement [24 CFR 982.201(b)(2)] HUD requires that extremely low-income (ELI) families make up at least 75 percent of the families admitted to the HCV program during the PHA's fiscal year. ELI families are those with annual incomes at or below the federal poverty level or 30 percent of the area median income, whichever number is higher. To ensure this requirement is met, a PHA may skip non-ELI families on the waiting list in order to select an ELI family. Low-income families admitted to the program that are "continuously assisted" under the 1937 Housing Act [24 CFR 982.4(b)], as well as low-income or moderate-income families admitted to the program that are displaced as a result of the prepayment of the mortgage or voluntary termination of an insurance contract on eligible low-income housing, are not counted for income targeting purposes [24 CFR 982.201(b)(2)(v)].

other eligible families on an as-needed basis to ensure the income targeting requirement is met. Order of Selection The PHA system of preferences may select families based on local preferences according to the date and time of application or by a random selection process (lottery) [24 CFR 982.207(c)]. If a PHA does not have enough funding to assist the family at the top of the waiting list, it is not permitted to skip down the waiting list to a family that it can afford to subsidize when there are not sufficient funds to subsidize the family at the top of the waiting list [24 CFR 982.204(d) and (e)].

4-III.D. NOTIFICATION OF SELECTION

When a family has been selected from the waiting list, the PHA must notify the family [24 CFR 982.554(a)].

4-III.E. THE APPLICATION INTERVIEW

HUD recommends that the PHA obtain the information and documentation needed to make an eligibility determination though a face-to-face interview with a PHA representative [HCV GB, pg. 4-16]. Being invited to attend an interview does not constitute admission to the program.

Assistance cannot be provided to the family until all SSN documentation requirements are met. However, if the PHA determines that an applicant family is otherwise eligible to participate in the program, the family may retain its place on the waiting list for a period of time determined by the PHA [Notice PIH 2018-24]. Reasonable accommodation must be made for persons with disabilities who are unable to attend an interview due to their disability.

The household composition cannot deviate from the last update provided by the family unless the family member is a result of birth, adoption, or court awarded custody.

• A full application interview notification will be sent via email through the

Applicant Portal or mailed to the applicant, as designated by the Authority. If the applicant is unable to participate with the scheduled interview, the applicant should contact the Authority in advance to schedule a new appointment.

• In all circumstances, if an applicant does not attend a scheduled interview, the

Authority will send another notification via email through the Applicant Portal or mailed with a new interview appointment time, as designated by the Authority. Applicants who fail to attend two scheduled interviews without Authority approval will have their pre-applications made inactive (and removed from the waiting list) based on the applicant's failure to supply information needed to determine eligibility.

• The second appointment notification will state that failure to appear for the

appointment without a request to reschedule will be interpreted to mean that the applicant is no longer interested and their application will be made inactive (and removed from the waiting list). Such failure to act on the part of the applicant prevents the Authority from making an eligibility determination; therefore, the Authority will not offer an informal hearing.

• The head of household, the spouse/co-head, and all other adult members of the

household will be required to participate with the full application interview together unless otherwise noted by means of a reasonable accommodation.

present at the interview will not begin until signed release forms are returned to the Authority.

• The applicant must provide the information necessary to establish the applicant's

eligibility, including suitability, and to determine the appropriate amount of rent the family will pay. The applicant must also complete required forms, provide required signatures, and submit required documentation. If any materials are missing, the Authority will provide the family with a written list of items that must be submitted.

• Any required documents or information that the applicant is unable to provide at

the full application interview must be provided within ten (10) business days of the interview.

• If the applicant is unable to obtain the information or materials within the

required time frame, the family may request an extension. If the required documents and information are not provided within the required time frame (plus any extensions), the family will be sent a notice of denial of admission (see Chapter 15).

• The full application interview will be conducted only if the head of household

provides appropriate documentation of legal identity for all household members (see Chapter 7).

• If the family representative does not provide the required documentation, the

appointment may be rescheduled (within ten (10) business days) when the proper documents have been obtained.

• If the applicant is claiming a waiting list preference, the applicant must provide

documentation to verify their eligibility for a preference (see Chapter 7).

• If the applicant is verified by the Authority eligible for the preference, the

Authority will proceed with the application interview.

• If the Authority determines the applicant is not eligible for the preference, the

interview will not proceed and the applicant will be placed back on the waiting list according to the original date and time of their application.

The head of household or spouse/cohead must provide acceptable documentation of legal identity. (Chapter 7 provides a discussion of proper documentation of legal identity.) If the family representative does not provide the required documentation at the time of the interview, they will be required to provide it within ten (10) business days. Pending disclosure and documentation of social security numbers, the Authority will allow the family to retain its place on the waiting list for 30 days. If not all household

members have disclosed their SSNs at the next time the Authority is issuing vouchers, the Authority will issue a voucher to the next eligible applicant family on the waiting list. The family must provide the information necessary to establish the family's eligibility and determine the appropriate level of assistance, and must complete required forms, provide required signatures, and submit required documentation. If any materials are missing, the Authority will provide the family with a written list of items that must be submitted. Any required documents or information that the family is unable to provide at the interview must be provided within the specified time frame provided to the applicant. Chapter 7 provides details about longer submission deadlines for particular items, including documentation of eligible noncitizen status. If the family is unable to obtain the information or materials within the required time frame, the family may request an extension. If the required documents and information are not provided within the required time frame (plus any extensions), the family will be sent a notice of denial (See Chapter 3). An advocate, interpreter, or other assistant may assist the family with the application and the interview process. Interviews will be conducted in English. For limited English proficient (LEP) applicants, the Authority will provide translation services in accordance with the Authority's LEP plan. If the applicant is unable to attend a scheduled interview, the applicant should contact the Authority in advance of the interview to schedule a new appointment. In all circumstances, if a applicant does not attend a scheduled interview, the Authority will send another notification with a new interview appointment time. Applicants who fail to attend two scheduled interviews without Authority approval will be denied assistance based on the applicant's failure to supply information needed to determine eligibility. A notice of denial will be issued in accordance with policies contained in Chapter 3.

4-III.F. COMPLETING THE APPLICATION PROCESS

The PHA must verify all information provided by the family (see Chapter 7). Based on verified information, the PHA must make a final determination of eligibility (see Chapter 3) and must confirm that the family qualified for any special admission, targeted funding admission, or selection preference that affected the order in which the family was selected from the waiting list.

will notify the applicant in writing that it has been returned to the waiting list, and will specify the reasons for it. If the Authority determines that the applicant is eligible to receive assistance, the Authority will invite the applicant to attend a briefing in accordance with the policies in

Chapter 5: Briefings and Voucher Issuance

INTRODUCTION This chapter explains the briefing and voucher issuance process. When a family is determined to be eligible for the Housing Choice Voucher (HCV) program, the PHA must ensure that the family fully understands the way the program operates and the family's obligations under the program. This is accomplished through both an oral briefing and provision of a briefing packet containing the HUD-required documents and other information the family needs to know in order to lease a unit under the program. Once the family is fully informed of the program's requirements, the PHA issues the family a voucher. The voucher includes the unit size for which the family qualifies based on the PHA's subsidy standards, as well as the issue and expiration date of the voucher. The voucher is the document that authorizes the family to begin its search for a unit and limits the amount of time the family has to successfully locate an acceptable unit. This chapter describes HUD regulations and PHA policies related to these topics in two parts: Part I: Briefings and Family Obligations. This part details the program's requirements for briefing families orally, and for providing written materials describing the program and its requirements. It includes a particular focus on the family's obligations under the program. Part II: Subsidy Standards and Voucher Issuance. This part discusses the PHA's standards for determining how many bedrooms a family of a given composition qualifies for, which in turn affects the amount of subsidy the family can receive. It also discusses the policies that dictate how vouchers are issued, and how long families have to locate a unit.

Part I: Briefings And Family Obligations

5-I.A. OVERVIEW

HUD regulations require the PHA to conduct mandatory briefings for applicant families who qualify for a voucher. The briefing provides a broad description of owner and family responsibilities, explains the PHA's procedures, and includes instructions on how to lease a unit. This part describes how oral briefings will be conducted, specifies what written information will be provided to families, and lists the family's obligations under the program. The PHA must take reasonable steps to ensure meaningful access by persons with Limited English proficiency.

5-I.B. BRIEFING [24 CFR 982.301]

Notification of Briefing Prior to issuance of a voucher, the PHA must give the family an oral briefing and provide the family with a briefing packet containing written information about the program. Families may be briefed in individual face-to-face meetings, through group briefing sessions, or via remote briefing sessions.

Attendance

Conducting Remote Briefings The PHA must ensure that the lack of technology or inability to use technology for remote briefings does not pose a disadvantage to families that may not be apparent to the PHA. The PHA must ensure that the family has appropriate technological access in order to fully participate in the remote briefing.

Oral Briefing [24 CFR 982.301(a)] Each briefing must provide information on the following subjects:

• How the Housing Choice Voucher program works;
• Family and owner responsibilities;
• Where the family can lease a unit, including renting a unit inside or outside the PHA's

jurisdiction;

• An explanation of how portability works.
• The PHA must inform the family of how portability may affect the family's assistance

through screening, subsidy standards, payment standards, and any other elements of the portability process which may affect the family's assistance; and

• An explanation of the advantages of areas that do not have a high concentration of low-

income families. The PHA may not discourage the family from choosing to live anywhere in the PHA jurisdiction or outside the PHA jurisdiction under portability, unless otherwise expressly authorized by statute, regulation, PIH Notice, or court order. The PHA must take appropriate steps to ensure effective communication in accordance with 24 CFR 8.6 and 28 CFR part 35, subpart E, and must provide information on the reasonable accommodation process.

Briefing Packet [24 CFR 982.301(b); New HCV GB, Housing Search and Leasing, p. 7] Documents and information provided in the briefing packet must include the following:

• The term of the voucher, voucher suspensions, and the PHA's policies on any extensions of

the term. If the PHA allows extensions, the packet must explain how the family can request an extension.

• A description of the method used to calculate the housing assistance payment for a family,

including how the PHA determines the payment standard for a family, how the PHA determines total tenant payment for a family, and information on the payment standard and utility allowance schedule.

• An explanation of how the PHA determines the maximum allowable rent for an assisted unit.
• Where the family may lease a unit and an explanation of how portability works, including

information on how portability may affect the family's assistance through screening, subsidy standards, payment standards, and any other elements of the portability process that may affect the family's assistance.

• The HUD-required tenancy addendum, which must be included in the lease.
• The form the family must use to request approval of tenancy, and a description of the

procedure for requesting approval for a tenancy.

• A statement of the PHA policy on providing information about families to prospective

owners.

• The PHA subsidy standards and when the PHA will consider granting exceptions as allowed

by 24 CFR 982.404402(b)(8), and when exceptions are required as a reasonable accommodation for persons with disabilities under Section 504, the Fair Housing Act, or the Americans with Disabilities Act (ADA).

• Materials (e.g., brochures) on how to select a unit and any additional information on

selecting a unit that HUD provides (e.g., HUD brochure entitled, "A Good Place to Live").

• Information on federal, state and local equal opportunity laws, the contact information for the

Section 504 coordinator, a copy of the housing discrimination complaint form, and information on how to request a reasonable accommodation or modification (including information on requesting exception payment standards as a reasonable accommodation) under Section 504, the Fair Housing Act, or the Americans with Disabilities Act (ADA).

• A list of landlords known to the PHA who may be willing to lease a unit to the family or

other resources (e.g., newspapers, organizations, online search tools) known to the PHA that may assist the family in locating a unit. PHAs must ensure that the list of landlords or other resources covers areas outside of poverty or minority concentration.

• Notice that if the family includes a person with disabilities, the PHA is subject to

requirements under 24 CFR 8.28(a)(3) to provide a current listing of accessible units known to the PHA, and if necessary, other assistance in locating an available unit.

• The family obligations under the program.

• PHA informal hearing procedures including when the PHA is required to offer a participant

family the opportunity for an informal hearing, and how to request the hearing.

• An explanation of the advantages of moving to an area that does not have a high

concentration of low-income families, which may include access to accessible and high- quality housing, transit, employment opportunities, educational opportunities, recreational facilities, public safety stations, retail services, and health services.

• The HUD pamphlet on lead-based paint entitled, "Protect Your Family from Lead in Your

Home" [24 CFR 35.88]. If the PHA is located in a metropolitan area, the following additional information must be included in the briefing packet in order to receive full points under SEMAP Indicator 7, Expanding Housing Opportunities [24 CFR 985.3(g)]:

• Maps showing areas with housing opportunities outside areas of poverty or minority

concentration, both within its jurisdiction and its neighboring jurisdiction

• Information about the characteristics of these areas including job opportunities, schools,

transportation, and other services

• An explanation of how portability works, including a list of portability contact persons for

neighboring PHAs with names, addresses, and telephone numbers Additional Items to Be Included in the Briefing Packet In addition to items required by the regulations, PHAs may wish to include supplemental materials to help explain the program to both participants and owners [HCV GB p. 8-7, Notice PIH 2017-12].

5-I.C. FAMILY OBLIGATIONS

Obligations of the family are described in the housing choice voucher (HCV) regulations and on the voucher itself. These obligations include responsibilities the family is required to fulfill, as well as prohibited actions. The PHA must inform families of these obligations during the oral briefing, and the same information must be included in the briefing packet. When the family's unit is approved and the HAP contract is executed, the family must meet those obligations in order to continue participating in the program. Violation of any family obligation may result in termination of assistance, as described in Chapter 12. Time Frames for Reporting Changes Required by Family Obligations

• The family must supply any information that the PHA or HUD determines to be necessary,

including submission of required evidence of citizenship or eligible immigration status.

• The family must supply any information requested by the PHA or HUD for use in a regularly

scheduled reexamination or interim reexamination of family income and composition.

• The family must disclose and verify social security numbers and sign and submit consent

forms for obtaining information.

• Any information supplied by the family must be true and complete.
• The family is responsible for any deficiencies under the National Standards for the Physical

Inspection of Real Estate (NSPIRE) caused by failure to pay tenant-provided utilities or appliances, or damages to the dwelling unit or premises beyond ordinary wear and tear caused by any member of the household or guest.

• The family must allow the PHA to inspect the unit at reasonable times and after reasonable

notice, as described in Chapter 8 of this plan.

• The family must not commit any serious or repeated violation of the lease.

• The family must notify the PHA and the owner before moving out of the unit or terminating

the lease.

• The family must promptly give the PHA a copy of any owner eviction notice.
• The family must use the assisted unit for residence by the family. The unit must be the

family's only residence.

• The composition of the assisted family residing in the unit must be approved by the PHA.

The family must promptly notify the PHA in writing of the birth, adoption, or court-awarded custody of a child. The family must request PHA approval to add any other family member as an occupant of the unit.

• The family must promptly notify the PHA in writing if any family member no longer lives in

the unit.

• If the PHA has given approval, a foster child or a live-in aide may reside in the unit. The

PHA has the discretion to adopt reasonable policies concerning residency by a foster child or a live-in aide, and to define when PHA consent may be given or denied. For policies related to the request and approval/disapproval of foster children, foster adults, and live-in aides, see Chapter 3 (sections I.K and I.M), and Chapter 11 (section II.B).

• The family must not sublease the unit, assign the lease, or transfer the unit.

• The family must supply any information requested by the PHA to verify that the family is

living in the unit or information related to family absence from the unit.

• The family must promptly notify the PHA when the family is absent from the unit.

• The family must pay utility bills and provide and maintain any appliances that the owner is

not required to provide under the lease [Form HUD-52646, Voucher].

• The family must not own or have any interest in the unit, (other than in a cooperative and

owners of a manufactured home leasing a manufactured home space).

• Family members must not commit fraud, bribery, or any other corrupt or criminal act in

connection with the program. (See Chapter 14, Program Integrity for additional information).

• Family members must not engage in drug-related criminal activity or violent criminal activity

or other criminal activity that threatens the health, safety or right to peaceful enjoyment of other residents and persons residing in the immediate vicinity of the premises. See Chapter 12 for HUD and PHA policies related to drug-related and violent criminal activity.

• Members of the household must not engage in abuse of alcohol in a way that threatens the

health, safety or right to peaceful enjoyment of the other residents and persons residing in the immediate vicinity of the premises. See Chapter 12 for a discussion of HUD and PHA policies related to alcohol abuse.

• An assisted family or member of the family must not receive HCV program assistance while

receiving another housing subsidy, for the same unit or a different unit under any other federal, state or local housing assistance program.

• A family must not receive HCV program assistance while residing in a unit owned by a

parent, child, grandparent, grandchild, sister or brother of any member of the family, unless the PHA has determined (and has notified the owner and the family of such determination) that approving rental of the unit, notwithstanding such relationship, would provide

reasonable accommodation for a family member who is a person with disabilities. [Form HUD-52646, Voucher]

Part Ii: Subsidy Standards And Voucher Issuance

5-II.A. OVERVIEW

The PHA must establish subsidy standards that determine the number of bedrooms needed for families of different sizes and compositions. This part presents the policies that will be used to determine the family unit size (also known as the voucher size) a particular family should receive, and the policies that govern making exceptions to those standards. The PHA must also establish policies related to the issuance of the voucher, to the voucher term, and to any extensions of the voucher term.

5-II.B. DETERMINING FAMILY UNIT (VOUCHER) SIZE [24 CFR 982.402]

For each family, the PHA determines the appropriate number of bedrooms under the PHA subsidy standards and enters the family unit size on the voucher that is issued to the family. The family unit size does not dictate the size of unit the family must actually lease, nor does it determine who within a household will share a bedroom/sleeping room. The following requirements apply when the PHA determines family unit size:

• The subsidy standards must provide for the smallest number of bedrooms needed to house a

family without overcrowding.

• The subsidy standards must be consistent with space requirements under the housing quality

standards.

• The subsidy standards must be applied consistently for all families of like size and

composition.

• A child who is temporarily away from the home because of placement in foster care is

considered a member of the family in determining the family unit size.

• A family that consists of a pregnant woman (with no other persons) must be treated as a two-

person family.

• Any live-in aide (approved by the PHA to reside in the unit to care for a family member who

is disabled or is at least 50 years of age) must be counted in determining the family unit size;

• Unless a live-in-aide resides with a family, the family unit size for any family consisting of a

single person must be either a zero- or one-bedroom unit, as determined under the PHA subsidy standards.

All standards in this section relate to the number of bedrooms not the family's actual living arrangements.

One bedroom will generally be assigned for each two family members. The Authority will consider factors such as family characteristics including sex, age, or relationship. Consideration will also be given for medical reasons and the presence of a live-in aide.

Extra bedrooms approved as a reasonable accommodation for a person with disabilities may be approved for medical equipment if the need is verified by a person knowledgeable with the family and the disability need. The actual equipment in the extra bedroom will be verified by the Authority during the annual inspection of the unit. If the extra bedroom is not being used for the intended purpose, the family may be required to downsize to a smaller unit when a unit becomes available. Generally, the Authority assigns one bedroom to two people within the following guidelines:

• Foster children will be included in determining unit size only if they will be in the

unit for more than 12 months;

• Live-in attendants will generally be provided a separate bedroom. No additional

bedrooms are provided for the attendant's family;

• Space may be provided for a child who is away at school but who lives with the

family during school recesses;

• Space will not be provided for a family member, other than a spouse, who will

be absent most of the time, such as a member who is away in the military;

• Adults of different generations may have separate bedrooms;

• Single person families shall be allocated a zero or a one-bedroom voucher.

The Authority will reference the following chart in determining the appropriate voucher size for a family:

6 Bedroom 6 12

5-II.C. EXCEPTIONS TO SUBSIDY STANDARDS

In determining family unit size for a particular family, the PHA may grant an exception to its established subsidy standards if the PHA determines that the exception is justified by the age, sex, health, handicap, or relationship of family members or other personal circumstances [24 CFR 982.402(b)(8)]. Reasons may include, but are not limited to:

• A need for an additional bedroom for medical equipment
• A need for a separate bedroom for reasons related to a family member's disability, medical or

health condition For a single person who is not elderly, disabled, or a remaining family member, an exception cannot override the regulatory limit of a zero or one bedroom [24 CFR 982.402(b)(8)].

5-II.D. VOUCHER ISSUANCE [24 CFR 982.302]

When a family is selected from the waiting list (or as a special admission as described in Chapter 4), or when a participant family wants to move to another unit, the PHA issues a Housing Choice Voucher, form HUD-52646. This chapter deals only with voucher issuance for applicants. For voucher issuance associated with moves of program participants, please refer to Chapter 10. The voucher is the family's authorization to search for housing. It specifies the unit size for which the family qualifies, and includes both the date of voucher issuance and date of expiration. It contains a brief description of how the program works and explains the family obligations under the program. The voucher is evidence that the PHA has determined the family to be eligible for the program, and that the PHA expects to have money available to subsidize the family if the family finds an approvable unit. However, the PHA does not have any liability to any party by the issuance of the voucher, and the voucher does not give the family any right to participate in the PHA's housing choice voucher program [Voucher, form HUD-52646] A voucher can be issued to an applicant family only after the PHA has determined that the family is eligible for the program based on verification of information received within the 60 days prior to issuance [24 CFR 982.201(e)] and after the family has attended an oral briefing [HCV 8-1].

5-II.E. VOUCHER TERM AND EXTENSIONS

Voucher Term [24 CFR 982.303] The initial term of a voucher must be at least 60 calendar days. The initial term must be stated on the voucher [24 CFR 982.303(a)].

All requests for extensions to the voucher term must be made in writing and submitted to the Authority prior to the expiration date of the voucher (or extended term of the voucher). The Authority will decide whether to approve or deny an extension request within ten (10) business days of the date the request is received, and will immediately provide the family written notice of its decision. Suspensions of Voucher Term [24 CFR 982.303(c)] The PHA must provide for suspension of the initial or any extended term of the voucher from the date the family submits a request for PHA approval of the tenancy until the date the PHA notifies the family in writing whether the request has been approved or denied.

In the event the RFTA is disapproved or cancelled, the family is entitled to the remaining time from suspension date to the voucher expiration date (the period that the Authority holds the documents is not counted against the family's voucher term). This practice is also called tolling. Expiration of Voucher Term Once a family's housing choice voucher term (including any extensions) expires, the family is no longer eligible to search for housing under the program. If the family still wishes to receive assistance, the PHA may require that the family reapply, or may place the family on the waiting list with a new application date but without requiring reapplication. Such a family does not become ineligible for the program on the grounds that it was unable to locate a unit before the voucher expired [HCV GB p. 8-13].

INCOME AND SUBSIDY DETERMINATIONS

[24 CFR Part 5, Subparts E and F; 24 CFR 982]

Introduction

This chapter is applicable prior to the Authority's HOTMA 102/104 compliance date. After this date, the Authority will follow policies as outlined in Chapter 6.B. The program regulations in the current Code of Federal Regulations (CFRs) were updated for HOTMA on January 1, 2024. As a result, pre-HOTMA regulations from 2023 are no longer available on the electronic CFRs. However, since full HOTMA implementation is still pending, the pre-HOTMA regulations continue to apply to some elements of the program, and this chapter makes references to both pre-HOTMA and HOTMA regulations where applicable. Where HOTMA regulations apply, citations in this chapter have been provided indicating that current HOTMA CFRs are applicable. For all other citations, the pre-HOTMA CFRs apply. The federal government archives previous versions of the CFRs, and PHAs may access them here: https://www.govinfo.gov/app/collection/cfr/2023/title24. A family's income determines eligibility for assistance and is also used to calculate the family's payment and the PHA's subsidy. The PHA will use the policies and methods described in this chapter to ensure that only eligible families receive assistance and that no family pays more or less than its obligation under the regulations. This chapter describes HUD regulations and PHA policies related to these topics in three parts as follows: Part I: Annual Income. HUD regulations specify the sources of income which are excluded from the family's annual income. These requirements and PHA policies for calculating annual income are found in Part I. Part II: Adjusted Income. Once annual income has been established, HUD regulations require the PHA to subtract from annual income any of five mandatory deductions for which a family qualifies and allow the PHA to adopt additional permissive deductions. These requirements and PHA policies for calculating adjusted income are found in Part II. Part III: Calculating Family Share and PHA Subsidy. This part describes the statutory formula for calculating total tenant payment (TTP), the use of utility allowances, and the methodology for determining PHA subsidy and required family payment.

Part I: Annual Income

6-I.A. OVERVIEW [24 CFR 5.609]

5.609 Annual income. (a) Annual income means all amounts, monetary or not, which: (1) Go to, or on behalf of, the family head or spouse (even if temporarily absent) or to any other family member; or (2) Are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date; and (3) Which are not specifically excluded in paragraph [5.609(c)]. (4) Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access. In addition to this general definition, HUD regulations establish policies for treating specific types of income and assets. The full texts of those portions of the regulations are provided in exhibits at the end of this chapter as follows:

• Annual Income Inclusions (Exhibit 6-1)
• Annual Income Exclusions (as updated for HOTMA per Notice PIH 2024-38) (Exhibit 6-2)
• Treatment of Family Assets (Exhibit 6-3)
• The Effect of Welfare Benefit Reduction (Exhibit 6-4)

Sections 6-I.B and 6-I.C discuss general requirements and methods for calculating annual income. The rest of this section describes how each source of income is treated for the purposes of determining annual income. Verification requirements for annual income are discussed in

Chapter 7.A: Verification

6-I.B. HOUSEHOLD COMPOSITION AND INCOME

Overview Income received by all family members must be counted unless specifically excluded by the regulations. It is the responsibility of the head of household to report changes in family composition in accordance with HUD regulations and PHA policies in Chapter 11. The rules on which sources of income are counted vary somewhat by family member. The chart below summarizes how family composition affects income determinations.

Temporarily Absent Family Members The current regulations governing annual income do not specifically address temporarily absent family members. The regulations also do not define "temporarily" or "permanently" absent or specify a timeframe associated with a temporary versus a permanent absence.

Return of Permanently Absent Family Members

Family Members Permanently Confined for Medical Reasons If a family member is confined to a nursing home or hospital on a permanent basis, that person is no longer considered a family member and the income of that person is not counted [HCV GB, p. 5-22].

Caretakers for a Child

6-I.C. CALCULATING ANNUAL INCOME

The methodology used for calculating income differs depending on whether income is being calculated at initial occupancy, interim reexamination, or at annual reexamination. However, income from assets is always anticipated regardless of certification type. Anticipating Annual Income [24 CFR 5.609(c)(1)] At initial occupancy and for an interim reexamination of family income, the PHA is required to use anticipated income (current income) for the upcoming 12-month period following the new admission or interim reexamination effective date. Policies related to verifying income are found in Chapter 7.

Any time current circumstances are not used to project annual income, a clear rationale for the decision will be documented in the file. In all such cases the family may present information and documentation to the Authority to show why the historic pattern does not represent the family's anticipated income. In all cases, the family file will be documented with a clear record of the reason for the decision, and a clear audit trail will be left as to how the Authority annualized projected income. Known Changes in Income If the PHA verifies an upcoming increase or decrease in income at admission or interim reexamination, annual income will be projected by applying each income amount to the appropriate part of the 12-month period. Example: An employer reports that a full-time employee who has been receiving $8/hour will begin to receive $8.25/hour in the eighth week after the effective date of the new admission or interim reexamination. In such a case the PHA would calculate annual income as follows: ($8/hour × 40 hours × 7 weeks) + ($8.25 × 40 hours × 45 weeks). The family may present information that demonstrates that implementing a change before its effective date would create a hardship for the family. In such cases the PHA will calculate annual income using current circumstances and then, should the change in income require the PHA to conduct an interim reexamination, conduct an interim reexamination in accordance with PHA policy in Chapter 11. Calculating Annual Income at Annual Reexamination [24 CFR.609(c)(2); Notice PIH 2023-27] At annual reexamination, except where the PHA uses a streamlined income determination, PHAs must first determine the family's income for the previous 12-month period and use this amount as the family income for annual reexaminations; however, adjustments to reflect current income must be made. Any change of income since the family's last annual reexamination, including those that did not meet the threshold to process an interim reexamination of family income in accordance with PHA policies in Chapter 11 and HUD regulations, must be considered. If, however, there have been no changes to income, then the amount of income calculated for the previous 12-month period is the amount that will be used to determine the family's rental assistance. Income from assets is always anticipated, irrespective of the income examination type. Policies related to conducting annual reexaminations are located in Chapter 11.

6-I.D. EARNED INCOME

Wages and Related Compensation [24 CFR 5.609(a); Notice PIH 2023-27] The earned income of each member of the family who is 18 years of age or older, or who is the head of household or spouse/cohead regardless of age, is included in annual income. Income received as a day laborer or seasonal worker is also included in annual income, even if the source, date, or amount of the income varies [24 CFR 5.609 (b)(24) as updated for HOTMA]. Earned income means income or earnings from wages, tips, salaries, other employee compensation, and net income from self-employment. Earned income does not include any pension or annuity, transfer payments (meaning payments made or income received in which no

goods or services are being paid for, such as welfare, social security, and governmental subsidies for certain benefits), or any cash or in-kind benefits [24 CFR 5.100 as updated for HOTMA]. A day laborer is defined as an individual hired and paid one day at a time without an agreement that the individual will be hired or work again in the future [24 CFR 5.603(b) as updated for HOTMA]. Income earned as a day laborer is not considered nonrecurring income. A seasonal worker is defined as an individual who is hired into a short-term position (e.g., for which the customary employment period for the position is six months or fewer) and the employment begins about the same time each year (such as summer or winter). Typically, the individual is hired to address seasonal demands that arise for the particular employer or industry [24 CFR 5.603(b) as updated for HOTMA]. Some examples of seasonal work include employment limited to holidays or agricultural seasons. Seasonal work may include but is not limited to employment as a lifeguard, ballpark vendor, or snowplow driver [Notice PIH 2023- 27]. Income earned as a seasonal worker is not considered nonrecurring income.

Full-time status is defined by the educational or vocational institution the student is attending [New PH OCC GB, Lease Requirements, p. 5]. Income of a Live-in Aide Income earned by a live-in aide, as defined in [24 CFR 5.403], is not included in annual income [24 CFR 5.609(b)(8) as updated for HOTMA ]. (See Eligibility chapter for a full discussion of live-in aides.)

6-I.E. EARNED INCOME DISALLOWANCE FOR PERSONS WITH DISABILITIES

[24 CFR 5.617; Streamlining Final Rule (SFR) Federal Register 3/8/16; Notice PIH 2023-27] HOTMA removed the statutory authority for the EID. The EID is available only to families that are eligible for and participating on the program as of December 31, 2023, or before; no new families may be added on or after January 1, 2024. If a family is receiving the EID prior to or on the effective date of December 31, 2023, they are entitled to the full amount of the benefit for a full 24-month period. The policies below are applicable only to such families. No family will still be receiving the EID after December 31, 2025. The EID will sunset on January 1, 2026, and the PHA policies below will no longer be applicable as of that date or when the last qualifying family exhausts their exclusion period, whichever is sooner. Calculation of the Disallowance Calculation of the earned income disallowance for an eligible member of a qualified family begins with a comparison of the member's current income with their "baseline income." The family member's baseline income is their income immediately prior to qualifying for the EID. The family member's baseline income remains constant throughout the period that they are participating in the EID.

Calculation Method Initial 12-Month Exclusion During the initial exclusion period of 12 consecutive months, the full amount (100 percent) of any increase in income attributable to new employment or increased earnings is excluded.

Authority Policy

During the second 12-month exclusion period, the Authority will exclude 100 percent of any increase in income attributable to new employment or increased earnings. Lifetime Limitation The EID has a two-year (24-month) lifetime maximum. The two-year eligibility period begins at the same time that the initial exclusion period begins and ends 24 months later. During the 24- month period, an individual remains eligible for EID even if they begin to receive assistance from a different housing agency, move between public housing and Section 8 assistance, or have breaks in assistance. The EID will sunset on January 1, 2026. In no circumstances will a family member's exclusion period continue past January 1, 2026.

6-I.F. BUSINESS AND SELF-EMPLOYMENT INCOME [24 CFR 5.609(b)(28) as updated

for HOTMA; Notice PIH 2023-27] Annual income includes "net income from the operation of a business or profession. Net income is gross income minus business expenses that allows the business to operate. Gross income is all income amounts received into the business, prior to the deduction of business expenses. Expenditures for business expansion or amortization of capital indebtedness may not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family."

Independent Contractors Income received as an independent contractor is included in annual income, even if the source, date, or amount of the income varies [24 CFR 5.609 (b)(24) as updated for HOTMA]. An independent contractor is defined as an individual who qualifies as an independent contractor instead of an employee in accordance with the Internal Revenue Code Federal income tax requirements and whose earnings are consequently subject to the Self-Employment Tax. In general, an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done [24 CFR 5.603(b) as updated for HOTMA]. This may include individuals such as third-party delivery and transportation service providers and "gig workers" like babysitters, landscapers, rideshare drivers, and house cleaners. Income earned as an independent contractor is not considered nonrecurring income. Business Expansion

HUD regulations do not permit the PHA to deduct from gross income expenses for business expansion.

assets. However, if the family holds the assets in their own name (e.g., they own one-third of a restaurant) rather than in the name of a business entity, then the percentage value of the asset owned by the family is what is counted toward net family assets (e.g., one-third of the value of the restaurant) [Notice PIH 2023-27].

6-I.G. STUDENT FINANCIAL ASSISTANCE [24 CFR 5.609(b)(9)]

The treatment of student financial assistance depends on the HUD program, student/household characteristics, and the type of financial assistance received by the student. For public housing residents, all income received under Title IV of the HEA must be excluded from income. Other student financial assistance may be included depending on the students actual covered costs to For Section 8 programs, including HCV, however, for over 10 years HUD appropriations have included a provision that for Section 8 students who are age 23 and under and without dependent children, any amounts received in excess of tuition and any other required fees and charges must be considered income. Under HOTMA, HUD has interpreted this limitation to apply when the student is the head of household or spouse, but not when the student resides with their parents [71 FR 18146]. For any funds from a year where HUD's appropriations continue to include this Section 8 student financial assistance limitation, if the student does not reside with their parents is the head of household, cohead, or spouse, and is under the age of 23 or without dependent children, then both the assistance received under Title IV HEA and other student financial assistance received by the student is included as income to the extent that it exceeds the total of tuition and any other required fees and charges. In contrast, student financial assistance received by a Section 8 student who is the head of household, spouse, or cohead, and is over the age of 23 with dependent children, or a student who resides with their parents in a Section 8 unit, is governed by the HOTMA student rule, which is described below. During years in which an appropriations act does not contain this Section 8 student financial assistance limitation (or any other such limitation), then the determination of student financial assistance for all Section 8 students defaults to the methodology for public housing. HOTMA Student Financial Assistance Requirements [24 CFR 5.609(b)(9)] The regulations under HOTMA distinguish between two categories of student financial assistance paid to both full-time and part-time students. The first category is any assistance to students under section 479B of the Higher Education Act of 1965 (Title IV of the HEA) which must be excluded from the family's annual income [24 CFR 5.609(b)(9)(i)]. Examples of assistance under title IV of the HEA include:

• Federal Pell Grants;
• Teach Grants;
• Federal Work Study Programs;
• Federal Perkins Loans;
• Income earned in employment and training programs under section 134 of the Workforce

Innovation and Opportunity Act (WIOA); or

• Bureau of Indian Affairs/Education student assistance programs

- The Higher Education Tribal Grant - The Tribally Controlled Colleges or Universities Grant Program The second category is any other grant-in-aid, scholarship, or other assistance amounts an individual receives for the actual covered costs charged by the institute of higher education (not otherwise excluded by the Federally mandated income exclusions) [24 CFR 5.609(b)(9)(ii)]. Other student financial assistance received by the student that, either by itself or in combination with HEA assistance, exceeds the actual covered costs is included in income. Actual covered costs are defined as the actual costs of:

• Tuition, books, and supplies;

- Including supplies and equipment to support students with learning disabilities or other disabilities

• Room and board; and
• Other fees required and charged to a student by the education institution.

For a student who is not the head of household or spouse/cohead, actual covered costs also include the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit. Further, to qualify, other student financial assistance must be expressly:

• For tuition, book, supplies, room and board, or other fees required and charged to the student

by the educational institution;

• To assist a student with the costs of higher education; or
• To assist a student who is not the head of household or spouse with the reasonable and actual

costs of housing while attending the educational institution and not residing in an assisted unit. The student financial assistance may be paid directly to the student or to the educational institution on the student's behalf. However, any student financial assistance paid to the student must be verified by the PHA. The financial assistance must be a grant or scholarship received from:

• The Federal government;
• A state, tribal, or local government ;
• A private foundation registered as a nonprofit;
• A business entity (such as corporation, general partnership, limited liability company, limited

partnership, joint venture, business trust, public benefit corporation, or nonprofit entity); or

• An institution of higher education.

Student financial assistance, does not include:

• Financial support provided to the student in the form of a fee for services performed; (e.g., a

work study or teaching fellowship that is not excluded under section 479B of the Higher Education Act HEA);

• Gifts, including gifts from family or friends; or
• Any amount of the scholarship or grant that, either by itself or in combination with assistance

excluded under the HEA, exceeds the actual covered costs of the student. Calculating Income from Student Financial Assistance [HOTMA Student Financial Assistance Resource Sheet; Notice PIH 2023-27] There are two steps required as part of the calculation for Section 8 students. First, determine the student's relationship to the household, age, and whether they have dependent children. Second, calculate whether any excess student financial assistance should be included in the family's income. If the student does not live with their parents and is the head of household, cohead, or spouse, and is 23 or younger or does not have dependent children, then Title IV HEA assistance is considered when determining the student's total financial aid amount. Subtract the total tuition plus required fees and charges from the total student financial assistance (Title IV HEA assistance and any other student financial assistance). If the total tuition plus required fees and charges is zero or exceeds the amount of total financial assistance from all sources, then no student financial assistance is included in annual income. Any amount of student financial assistance that exceeds the total tuition plus required fees and charges must be included in annual income. If the student either lives with their parents or is over 23 with dependent children, then the calculation will use the HOTMA methodology for calculating financial assistance, which always begins with deducting the assistance received under 479B of the HEA from the total actual covered costs, because the 479B assistance is intended to pay the student's actual covered costs. When a student receives assistance from both Title IV of the HEA and from other sources, the assistance received under Title IV of the HEA must be applied to the student's actual covered costs first and then other student financial assistance is applied to any remaining actual covered costs. Once actual costs are covered, any remaining student financial assistance is considered income.

6-I.H. PERIODIC PAYMENTS [Notice PIH 2023-27]

Periodic payments are forms of income received on a regular basis. Income that will not be repeated beyond the coming year (i.e., the 12 months following the effective date of the certification), based on information provided by the family, is considered nonrecurring income and is excluded from annual income. Income that has a discrete end date and will not be repeated beyond the coming year is excluded from a family's annual income because it is nonrecurring income. For example, a family receives income from a guaranteed income program in their city that has a discrete beginning and end date. While the guaranteed income will be repeated in the coming year, it will end before the family's next annual reexamination. This income is fully excluded from annual income. However, this does not include unemployment income and other types of periodic payments that are received at regular intervals (such as weekly, monthly, or yearly). Unemployment income and other types of periodic payments are not considered nonrecurring income, unless explicitly excluded from income under 25 CFR 5.609(b) as updated for HOTMA, and thus they are included in annual income. Insurance payments and settlements for personal or property losses, including but not limited to payments under health insurance, motor vehicle insurance, and workers' compensation, are excluded from annual income. Any workers' compensation is always excluded from annual income, regardless of the frequency or length of the payments. Lump-Sum Payments for the Delayed Start of a Periodic Payment [24 CFR 5.609(b)(16) as updated for HOTMA] Deferred periodic amounts from Supplemental Security Income (SSI) and Social Security benefits that are received in a lump sum amount or in prospective monthly amounts, or any deferred Department of Veterans Affairs (VA) disability benefits that are received in a lump sum amount or in prospective monthly amounts are excluded from annual income.

Retirement Accounts [24 CFR 5.609(b)(26) as updated for HOTMA; Notice PIH 2023-27] Income received from any account under a retirement plan recognized as such by the IRS, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals is not considered actual income from assets. However, any distribution of periodic payments from such accounts is included in annual income at the time they are received by the family. An asset moved to a retirement account held by a member of the family is not considered to be an asset disposed of for less than fair market value. Social Security Benefits [Notice PIH 2023-27] The Authority is required to use the gross benefit amount to calculate annual income from Social Security benefits. Annually in October, the Social Security Administration (SSA) announces the cost-of-living adjustment (COLA) by which federal Social Security and SSI benefits are adjusted to reflect the increase, if any, in the cost of living. The federal COLA does not apply to state-paid disability benefits. Effective the day after the SSA has announced the COLA, PHAs are required to factor in the COLA when determining Social Security and SSI annual income for all annual reexaminations and interim reexaminations of family income that have not yet been completed and will be effective January 1 or later of the upcoming year [Notice PIH 2023-27]. When a family member's benefits are garnished, levied, or withheld to pay restitution, child support, tax debt, student loan debt, or other debts, the PHA must use the gross amount of the income, prior to the reduction, to determine a family's annual income.

Alimony and Child Support

6-I.I. NONRECURRING INCOME [24 CFR 5.609(b)(24) as updated for HOTMA and

Notice PIH 2023-27] Nonrecurring income, which is income that will not be repeated beyond the coming year (e.g., 12 months following the effective date of the certification) based on information provided by the family, is excluded from annual income. The PHA may accept a self-certification from the family stating that the income will not be repeated in the coming year. See Chapter 7 for PHA policies related to verification of nonrecurring income. Income received as an independent contractor, day laborer, or seasonal worker is not excluded from income as nonrecurring income, even if the source, date, or amount of the income varies. Income that has a discrete end date and will not be repeated beyond the coming year during the family's upcoming annual reexamination period will be excluded from a family's annual income as nonrecurring income. This exclusion does not include unemployment income and other types of periodic payments that are received at regular intervals (such as weekly, monthly, or yearly). Income amounts excluded under this category may include, but are not limited to:

• Nonrecurring payments made to the family or to a third party on behalf of the family to assist

with utilities;

• Payments for eviction prevention;
• Security deposits to secure housing;
• Payments for participation in research studies (depending on the duration); and
• General one-time payments received by or on behalf of the family.

Nonrecurring income that is excluded under the regulations includes:

• Payments from the U.S. Census Bureau for employment (relating to decennial census or the

American Community Survey) lasting no longer than 180 days and not culminating in permanent employment [24 CFR 5.609(b)(24)(i) as updated for HOTMA].

• Direct federal or state payments intended for economic stimulus or recovery [24 CFR

5.609(b)(24)(ii) as updated for HOTMA].

• Amounts directly received by the family as a result of state refundable tax credits or state or

federal tax refunds at the time they are received [24 CFR 5.609(b)(24)(iii) and (iv) as updated for HOTMA].

• Gifts for holidays, birthdays, or other significant life events or milestones (e.g., wedding

gifts, baby showers, anniversaries) [24 CFR 5.609(b)(24)(v) as updated for HOTMA].

• Non-monetary, in-kind donations, such as food, clothing, or toiletries, received from a food

bank or similar organization [24 CFR 5.609(b)(24)(vi) as updated for HOTMA]. When calculating annual income, PHAs are prohibited from assigning monetary value to such non- monetary in-kind donations received by the family [Notice PIH 2023-27]. Non-recurring, non-monetary in-kind donations from friends and family are excluded as non-recurring

income. However, the value of regular in-kind donations (such as the value of groceries) received by friends and family are included.

• Lump-sum additions to net family assets, including but not limited to lottery or other contest

winnings [24 CFR 5.609(b)(24)(vii) as updated for HOTMA].

6-I.J. WELFARE ASSISTANCE

Overview Welfare assistance is counted in annual income. Welfare assistance includes Temporary Assistance for Needy Families (TANF) and any payments to individuals or families based on need that are made under programs funded separately or jointly by federal, state, or local governments. Sanctions Resulting in the Reduction of Welfare Benefits [24 CFR 5.615] The PHA must make a special calculation of annual income when the welfare agency imposes certain sanctions on certain families. The full text of the regulation at 24 CFR 5.615 is provided as Exhibit 6-3. The requirements are summarized below. This rule applies only if a family was receiving HCV assistance at the time the sanction was imposed. Covered Families The families covered by 24 CFR 5.615 are those "who receive welfare assistance or other public assistance benefits ('welfare benefits') from a State or other public agency ('welfare agency') under a program for which Federal, State or local law requires that a member of the family must participate in an economic self-sufficiency program as a condition for such assistance" [24 CFR 5.615(b)] Imputed Income When a welfare agency imposes a sanction that reduces a family's welfare income because the family commits fraud or fails to comply with the agency's economic self-sufficiency program or work activities requirement, the PHA must include in annual income "imputed" welfare income. The PHA must request that the welfare agency provide the reason for the reduction of benefits and the amount of the reduction of benefits. The imputed welfare income is the amount that the benefits were reduced as a result of the sanction. This requirement does not apply to reductions in welfare benefits: (1) at the expiration of the lifetime or other time limit on the payment of welfare benefits, (2) if a family member is unable to find employment even though the family member has complied with the welfare agency economic self-sufficiency or work activities requirements, or (3) because a family member has not complied with other welfare agency requirements [24 CFR 5.615(b)(2)]. Offsets The amount of the imputed welfare income is offset by the amount of additional income the family begins to receive after the sanction is imposed. When the additional income equals or exceeds the imputed welfare income, the imputed income is reduced to zero [24 CFR 5.615(c)(4)].

6-I.K. STATE PAYMENTS TO ALLOW INDIVIDUALS WITH DISABILITIES TO

LIVE AT HOME [24 CFR 5.609(b)(19) as updated for HOTMA] Payments made by or authorized by a state Medicaid agency (including through a managed care entity) or other state or federal agency to an assisted family to enable a member of the assisted family who has a disability to reside in the family's assisted unit are excluded. Authorized payments may include payments to a member of the assisted family through state Medicaid-managed care systems, other state agencies, federal agencies or other authorized entities. The payments must be received for caregiving services a family member provides to enable another member of the assisted family who has a disability to reside in the family's assisted unit. Payments to a family member for caregiving services for someone who is not a member of the assisted family (such as for a relative that resides elsewhere) are not excluded from income. Furthermore, if the agency is making payments for caregiving services to the family member for an assisted family member and for a person outside of the assisted family, only the payments attributable to the caregiving services for the caregiver's assisted family member would be excluded from income.

6-I.L. CIVIL RIGHTS SETTLEMENTS [24 CFR 5.609(b)(25) as updated for HOTMA;

FR Notice 2/14/23] Regardless of how the settlement or judgment is structured, civil rights settlements or judgments, including settlements or judgments for back pay, are excluded from annual income. This may include amounts received because of litigation or other actions, such as conciliation agreements, voluntary compliance agreements, consent orders, other forms of settlement agreements, or administrative or judicial orders under the Fair Housing Act, Title VI of the Civil Rights Act, Section 504 of the Rehabilitation Act (Section 504), the Americans with Disabilities Act, or any other civil rights or fair housing statute or requirement. While these civil rights settlement or judgment amounts are excluded from income, the settlement or judgment amounts will generally be counted toward the family's net family assets (e.g., if the funds are deposited into the family's savings account or a revocable trust under the control of the family or some other asset that is not excluded from the definition of net family assets). Income generated on the settlement or judgment amount after it has become a net family asset is not excluded from income. For example, if the family received a settlement or back pay and deposited the money in an interest-bearing savings account, the interest from that account would be income at the time the interest is received. Furthermore, if a civil rights settlement or judgment increases the family's net family assets such that they exceed $50,000 (as annually adjusted by an inflationary factor), then income will be imputed on the net family assets pursuant to 24 CFR 5.609(a)(2). If the imputed income, which HUD considers unearned income, increases the family's annual adjusted income by 10 percent or more, then an interim reexamination of income will be required unless the addition to the family's net family assets occurs within the last three months of the family's income certification period and the PHA or owner chooses not to conduct the examination.

6-I.M. ADDITIONAL EXCLUSIONS FROM ANNUAL INCOME [24 CFR 5.609(b); FR

Notice 1/31/2024] Other exclusions contained in 24 CFR 5.609(b) as updated for HOTMA and FR Notice 1/31/24 that have not been discussed earlier in this chapter include the following:

• Payments received for the care of foster children or foster adults or state or tribal kinship or

guardianship care payments [24 CFR 5.609(b)(4) as updated for HOTMA].

• Insurance payments and settlements for personal or property losses, including but not limited

to payments through health insurance, motor vehicle insurance, and workers' compensation [24 CFR 5.609(b)(5) as updated for HOTMA]. However, periodic payments paid at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that are received in lieu of wages are included in annual income [Notice PIH 2023-27].

• Amounts received by the family that are specifically for, or in reimbursement of, the cost of

health and medical care expenses for any family member [24 CFR 5.609(b)(6) as updated for HOTMA].

• Any amounts recovered in any civil action or settlement based on a claim of malpractice,

negligence, or other breach of duty owed to a family member arising out of law, that resulted in a member of the family becoming disabled [24 CFR 5.609(b)(7) as updated for HOTMA].

• Income and distributions from any Coverdell education savings account under Section 530 of

the Internal Revenue Code of 1986 or any qualified tuition program under Section 529 of such Code [24 CFR 5.609(b)(10) as updated for HOTMA].

• Income earned by government contributions to, and distributions from, "baby bond" accounts

created, authorized, or funded by federal, state, or local government [24 CFR 5.609(b)(10) as updated for HOTMA].

• The special pay to a family member serving in the Armed Forces who is exposed to hostile

fire [24 CFR 5.609(b)(11) as updated for HOTMA].

• Payments related to aid and attendance under 38 U.S.C. 1521 to veterans in need of regular

aid and attendance [24 CFR 5.609(b)(17) as updated for HOTMA]. This income exclusion applies only to veterans in need of regular aid and attendance and not to other beneficiaries of the payments, such as a surviving spouse [Notice PIH 2023-27].

• Loan proceeds (the net amount disbursed by a lender to or on behalf of a borrower, under the

terms of a loan agreement) received by the family or a third party (e.g., proceeds received by the family from a private loan to enable attendance at an educational institution or to finance the purchase of a car) [24 CFR 5.609(b)(20) as updated for HOTMA]. The loan borrower or co-borrower must be a member of the family for this income exclusion to be applicable [Notice PIH 2023-27].

• Payments received by tribal members as a result of claims relating to the mismanagement of

assets held in trust by the United States, to the extent such payments are also excluded from gross income under the Internal Revenue Code or other federal law [24 CFR 5.609(b)(21) as updated for HOTMA]. Generally, payments received by tribal members in excess of the first $2,000 of per capita shares are included in a family's annual income for purposes of determining eligibility. However, as explained in Notice PIH 2023-27, payments made under the Cobell Settlement, and certain per capita payments under the recent Tribal Trust Settlements, must be excluded from annual income.

• Replacement housing "gap" payments made in accordance with 49 CFR Part 24 that offset

increased out of pocket costs of displaced persons that move from one federally subsidized housing unit to another federally subsidized housing unit. Such replacement housing "gap" payments are not excluded from annual income if the increased cost of rent and utilities is subsequently reduced or eliminated, and the displaced person retains or continues to receive the replacement housing "gap" payments [24 CFR 5.609(b)(23) as updated for HOTMA].

• Income earned on amounts placed in a family's Family Self-Sufficiency account [24 CFR

5.609(b)(27) as updated for HOTMA].

• Amounts received by participants in other publicly assisted programs which are specifically

for or in reimbursement of out-of-pocket expenses incurred e.g., special equipment, clothing, transportation, childcare, etc.) and which are made solely to allow participation in a specific program [24 CFR 5.609(i)(12)(ii) as updated for HOTMA].

• Amounts received by a person with a disability that are disregarded for a limited time for

purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS) [(24 CFR 5.609(b)(12)(i) as updated for HOTMA].

• Amounts received under a resident service stipend not to exceed $200 per month. A resident

service stipend is a modest amount received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development [24 CFR 5.609 I(12)(ii) as updated for HOTMA].

Incremental earnings and benefits to any family member resulting from participation in qualifying training program funded by HUD or in qualifying federal, state, tribal, or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff are excluded from annual income. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives and are excluded only for the period during which the family member participates in the training program unless those amounts are excluded under 24 CFR 5.609(b)(9)(i) [24 CFR 5.609(b)(12)(iv) as updated for HOTMA].

• Reparation payments paid by a foreign government pursuant to claims filed under the laws of

that government by persons who were persecuted during the Nazi era [24 CFR 5.609(b)(13)] as updated for HOTMA.

• Adoption assistance payments for a child in excess of the amount of the dependent deduction

per adopted child [24 CFR 5.609(b)(15)] as updated for HOTMA.

• Refunds or rebates on property taxes paid on the dwelling unit [24 CFR 5.609(b)(20)] as

updated for HOTMA.

• Amounts that HUD is required by federal statute to exclude from consideration as income for

purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(b) as updated for HOTMA apply. HUD will publish a notice in the Federal Register to identify the benefits that qualify for this exclusion. Updates will be published when necessary [24 CFR 5.609(b)(22) as updated for HOTMA].

HUD publishes an updated list of these exclusions periodically. The most recent list of exclusions was published in the Federal Register on January 31, 2014. It includes: (a) The value of the allotment provided to an eligible household under the Food Stamp Act of 1977 (7 U.S.C. 2017 (b)). This exclusion also applies to assets. (b) Benefits under Section 1780 of the Richard B. Russell School Lunch Act and Child Nutrition Act of 1966, including WIC and reduced-price lunches. (c) Payments, including for supportive services and reimbursement of out-of-pocket expenses, to volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058). The exclusion also applies to assets. - Except, the exclusion does not apply when the Chief Executive Officer of the Corporation for National and Community Service determines that the value of all such payments, adjusted to reflect the number of hours such volunteers are serving, is equivalent to or greater than the minimum wage then in effect under the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) or the minimum wage, under the laws of the State where such volunteers are serving, whichever is the greater (42 U.S.C. 5044(f)(1)). (d) Certain payments received under the Alaska Native Claims Settlement Act (43 U.S.C. 1626(c)). (e) Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes (25 U.S.C. 5506). (f) Payments or allowances made under the Department of Health and Human Services' Low-Income Home Energy Assistance Program (42 U.S.C. 8624(f)(1)). (g) Allowances, earnings, and payments to individuals participating in programs under the Workforce Investment Act of 1998 which was reauthorized as the Workforce Innovation and Opportunity Act of 2014 (29 U.S.C. 3241(a)(2)). (h) Deferred disability benefits from the Department of Veterans Affairs, whether received as a lump sum or in monthly prospective amounts. (i) Income derived from the disposition of funds to the Grand River Band of Ottawa Indians (Pub. L. 94-540, 90 Section 6). (j) Payments, funds, or distributions authorized, established, or directed by the Seneca Nation Settlement Act of 1990 (25 U.S.C. 1774f(b)). (k) A lump sum or periodic payment received by an individual Indian pursuant to the Class Action Settlement Agreement in the United States District Court case entitled Elouise Cobell et al. v. Ken Salazar et al., for a period of one year from the time of receipt of that payment as provided in the Claims Resolution Act of 2010. (l) The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the U. S. Claims Court, the interests of individual Indians in trust or restricted lands, including the first $2,000 per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands

(25 U.S.C. 1407-1408). This exclusion does not include proceeds of gaming operations regulated by the Commission (25 U.S.C. 1407–1408). (m) Payments received from programs funded under Title V of the Older Americans Act of 1965 (42 U.S.C. 3056(f)). (n) Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in In Re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y.). This exclusion also applies to assets. (o) Payments received under 38 U.S.C. 1833(c) to children of Vietnam veterans born with spinal bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean and Thailand service veterans born with spinal bifida (42 U.S.C. 12637(d)). (p) Payments received under the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721). This exclusion also applies to assets. (q) The value of any childcare provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Childcare and Development Block Grant Act of 1990 (42 U.S.C. 9858q). (r) Earned income tax credit (EITC) refund payments received on or after January 1, 1991 (26 U.S.C. 32(j)). This exclusion also applies to assets. (s) Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation (Pub. L. 95-433) This exclusion also applies to assets. (t) Amounts of student financial assistance funded under Title IV of the Higher Education Act of 1965j, including awards under federal work-study programs or under the Bureau of Indian Affairs student assistance programs (20 U.S.C. 1087uu). For Section 8 programs, only, any financial assistance in excess of amounts received by an individual for tuition and any other required fees and charges under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), from private sources, or an institution of higher education (as defined under the Higher Education Act of 1965 (20 U.S.C. 1002)), shall be considered income if the individual is over the age of 23 with dependent children (Pub. L. 109–115, section 327 (as amended)). (u) Allowances, earnings, and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d)). (v) Any amount of crime victim compensation that provides medical or other assistance (or payment or reimbursement of the cost of such assistance) under the Victims of Crime Act of 1984 received through a crime victim assistance program, unless the total amount of assistance that the applicant receives from all such programs is sufficient to fully compensate the applicant for losses suffered as a result of the crime (34 U.S.C. 20102(c)). (w) Any amounts in an "individual development account" are excluded from assets and any assistance, benefit, or amounts earned by or provided to the individual development

account are excluded from income, as provided by the Assets for Independence Act, as amended (42 U.S.C. 604(h)(4)). (x) Major disaster and emergency assistance received under the Robert T. Stafford Disaster Relief and Emergency Assistance Act and comparable disaster assistance provided by states, local governments, and disaster assistance organizations. This exclusion also applies to assets. (y) Distributions from an ABLE account, distributions from and certain contributions to an ABLE account established under the ABLE Act of 2014 (Pub. L. 113–295.), as described in Notice PIH 2019–09 or subsequent or superseding notice is excluded from income and assets. (z) The amount of any refund (or advance payment with respect to a refundable credit) issued under the Internal Revenue Code is excluded from income and assets for a period of 12 months from receipt (26 U.S.C. 6409). (aa) Assistance received by a household under the Emergency Rental Assistance Program pursuant to the Consolidated Appropriations Act, 2021 (Pub. L. 116–260, section 501(j)), and the American Rescue Plan Act of 2021. (ab) Per capita payments made from the proceeds of Indian Tribal Trust Settlements listed in IRS Notice 2013-1 and 2013-55 must be excluded from annual income unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe's private bank account in which the Tribe has deposited the settlement proceeds. Such amounts received in excess of the Tribal Trust Settlement are included in the gross income of the members of the Tribe receiving the per capita payments as described in IRS Notice 2013-1. The first $2,000 of per capita payments are also excluded from assets unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe's private bank account in which the Tribe has deposited the settlement proceeds (25 U.S.C. 117b(a), 25 U.S.C. 1407). (ac) Any amounts (i) not actually received by the family, (ii) that would be eligible for exclusion under 42 U.S.C. 1382b(a)(7), and (iii) received for service-connected disability under 38 U.S.C. Chapter 11 or dependency and indemnity compensation under 38 U.S.C. Chapter 13 (25 U.S.C. 4103(9)(C)) as provided by an amendment by the Indian Veterans Housing Opportunity Act of 2010 (Pub. L. 111–269 section 2) to the definition of income applicable to programs under the Native American Housing Assistance and Self-Determination Act (NAHASDA) (25 U.S.C. 4101 et seq.).

Part Ii: Assets

6-II.A. OVERVIEW

There is no asset limitation for participation in the HCV program. However, HUD requires that the Authority include in annual income the anticipated "interest, dividends, and other net income of any kind from real or personal property" [24 CFR 5.609(b)(3)]. This section discusses how the income from various types of assets is determined. For most types of assets, the Authority must determine the value of the asset in order to compute income from the asset. Therefore, for each asset type, this section discusses:

• How the value of the asset will be determined
• How income from the asset will be calculated

Exhibit 6-1 provides the regulatory requirements for calculating income from assets [24 CFR 5.609(b)(3)], and Exhibit 6-3 provides the regulatory definition of net family assets. This section begins with a discussion of general policies related to assets and then provides HUD rules and PHA policies related to each type of asset. Optional policies for family self-certification of assets are found in Chapter 7. General Policies Income from Assets The Authority generally will use current circumstances to determine both the value of an asset and the anticipated income from the asset. As is true for all sources of income, HUD authorizes the Authority to use other than current circumstances to anticipate income when (1) an imminent change in circumstances is expected (2) it is not feasible to anticipate a level of income over 12 months or (3) the Authority believes that past income is the best indicator of anticipated income. For example, if a family member owns real property that typically receives rental income but the property is currently vacant, the Authority can take into consideration past rental income along with the prospects of obtaining a new tenant.

• The market value of an asset is its worth in the market (e.g., the amount a buyer would pay

for real estate or the total value of an investment account).

• The cash value of an asset is its market value less all reasonable amounts that would be

incurred when converting the asset to cash.

• Note: The HUD field office no longer provides an interest rate for imputed asset income. The

"safe harbor" is now for the Authority to establish a passbook rate within 0.75 percent of a national average.

• The Authority must review its passbook rate annually to ensure that it remains within 0.75

percent of the national average.

according to the percentage of ownership. If no percentage is specified or provided for by state or local law, the Authority will prorate the asset evenly among all owners. Assets Disposed of for Less than Fair Market Value [24 CFR 5.603(b)] HUD regulations require the Authority to count as a current asset any business or family asset that was disposed of for less than fair market value during the two years prior to the effective date of the examination/reexamination, except as noted below. Minimum Threshold The HCV Guidebook permits the PHA to set a threshold below which assets disposed of for less than fair market value will not be counted [HCV GB, p. 5-27].

available to the Authority does not appear to agree with the information reported by the family.

Types of Assets Checking and Savings Accounts For regular checking accounts and savings accounts, cash value has the same meaning as market value. If a checking account does not bear interest, the anticipated income from the account is zero.

When the anticipated rate of return is not known (e.g., stocks), the Authority will calculate asset income based on the earnings for the most recent reporting period. Equity in Real Property or Other Capital Investments Equity (cash value) in a property or other capital asset is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker fees) that would be incurred in selling the asset [HCV GB, p. 5-25].

• Equity accounts in HUD homeownership programs [24 CFR5.603(b)]
• The value of a home currently being purchased with assistance under the HCV program

Homeownership Option for the first 10 years after the purchase date of the home [24 CFR 5.603(b), Notice PIH 2012-3]

• Equity in owner-occupied cooperatives and manufactured homes in which the family lives

[HCV GB, p. 5-25]

• Equity in real property when a family member's main occupation is real estate [HCV GB, p.

5-25]. This real estate is considered a business asset, and income related to this asset will be calculated as described in section 6-I.F.

• Interests in Indian Trust lands [24 CFR 5.603(b)]
• Real property and capital assets that are part of an active business or farming operation [HCV

GB, p. 5-25] The Authority must also deduct from the equity the reasonable costs for converting the asset to cash. Using the formula for calculating equity specified above, the net cash value of real property is the market value minus the balance of the loan (mortgage) minus the expenses to convert to cash [Notice PIH 2012-3].

the use of the property. If the property generates no income, actual anticipated income from the asset will be zero. In the case of a mortgage or deed of trust held by a family member, the outstanding balance (unpaid principal) is the cash value of the asset. The interest portion only of payments made to the family in accordance with the terms of the mortgage or deed of trust is counted as anticipated asset income.

Part Iii: Adjusted Income

6-III.A. INTRODUCTION

Overview HUD regulations require PHAs to deduct from annual income any of five mandatory deductions for which a family qualifies and allow the PHA to deduct other permissive deductions in accordance with PHA policy. The resulting amount is the family's adjusted income. Mandatory deductions are found in 24 CFR 5.611. 5.611 Adjusted income means annual income (as determined under § 5.609) of the members of the family residing or intending to reside in the dwelling unit, after making the following deductions: (a) Mandatory deductions (1) $480 for each dependent (adjusted annually by HUD, rounded to the next lowest multiple of $25); (2) $525 for any elderly family or disabled family (adjusted annually by HUD, rounded to the next lowest multiple of $25); (3) The sum of the following, to the extent the sum exceeds ten percent of annual income: (i) Unreimbursed health and medical care expenses of any elderly family or disabled family; (ii) Unreimbursed reasonable attendant care and auxiliary apparatus expenses for each member of the family who is a person with disabilities, to the extent necessary to enable any member of the family (including the member who is a person with disabilities) to be employed; and (4) Any reasonable childcare expenses necessary to enable a member of the family to be employed or to further his or her education. This part covers policies related to these mandatory deductions. Verification requirements related to these deductions are found in Chapter 7. Anticipating Expenses

school and non-school periods and cyclical medical expenses), the Authority will estimate costs based on historic data and known future costs. If a family has an accumulated debt for medical or disability assistance expenses, the Authority will include as an eligible expense the portion of the debt that the family expects to pay during the period for which the income determination is being made. However, amounts previously deducted will not be allowed even if the amounts were not paid as expected in a preceding period. The Authority may require the family to provide documentation of payments made in the preceding year.

When calculating health and medical care expenses, the Authority will include those expenses anticipated to be incurred during the 12 months following the certification date which are not covered by an outside source, such as insurance. The allowance is not intended to give a family an allowance equal to last year's expenses, but to anticipate regular ongoing and anticipated expenses during the coming year. Since these expenses are anticipated, the PH Occupancy Guidebook states "it is likely that actual expenses will not match what was anticipated. Typically, this would not be considered an underpayment as long as at the time of the annual reexamination, the expenses were calculated based on the appropriate verification" [New PH OCC GB, Income Determinations, p. 30]. For annual reexaminations, the Authority will use information for the previous 12-month period.

6-III.B. DEPENDENT DEDUCTION

An allowance of $480 is deducted from annual income for each dependent (which amount will be adjusted by HUD annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the next lowest multiple of $25) [24 CFR 5.611(a)(1)]. Dependent is defined as any family member other than the head, spouse, or cohead who is under the age of 18 or who is 18 or older and is a person with disabilities or a full-time student. Foster children, foster adults, and live-in aides are never considered dependents [24 CFR 5.603(b) as updated for HOTMA].

6-III.C. ELDERLY OR DISABLED FAMILY DEDUCTION

A single deduction of $525 is taken for any elderly or disabled family (which amount will be adjusted by HUD annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the next lowest multiple of $25) [24 CFR 5.611(a)(2)]. An elderly family is a family whose head, spouse, cohead, or sole member is 62 years of age or older, and a disabled family is a family whose head, spouse, cohead, or sole member is a person with disabilities [24 CFR 5.403].

6-III.D. HEALTH AND MEDICAL CARE EXPENSES DEDUCTION [24 CFR

5.611(a)(3)(i) and 5.603(b)] Unreimbursed health and medical care expenses may be deducted to the extent that, in combination with any disability assistance expenses, they exceed ten percent of annual income. The health and medical deduction is permitted only for families in which the head, spouse, or cohead is at least 62 or is a person with disabilities. If a family is eligible for a health and medical care expense deduction, the unreimbursed health and medical care expenses of all family members are included. The Authority calculates health and medical care expenses based on the family's past expenses, but accounting for any anticipated changes in expenses during the certification period. Definition of Medical Expenses HUD regulations define health and medical care expenses at 24 CFR 5.603(b) to mean "any costs incurred in the diagnosis, cure, mitigation, treatment, or prevention of disease or payments for treatments affecting any structure or function of the body. Health and medical care expenses include medical insurance premiums and long-term care premiums that are paid or anticipated during the period for which annual income is computed." Health and medical care expenses may be deducted from annual income only if they are eligible under this definition and not otherwise reimbursed. Although HUD revised the definition of health and medical care expenses to reflect the Internal Revenue Service (IRS) general definition of medical expenses, HUD is not permitting PHAs to specifically align their policies to IRS Publication 502. PHAs must review each expense to determine whether it is eligible in accordance with HUD's definition. While Authority policies may not specifically align with IRS Publication 502, HUD recommends PHAs use it as a standard for determining allowable expenses, and the PHA may list examples of allowable expenses in their policy provided they comply with HUD's definition at 24 CFR 5.603. The Authority may not define health and medical care expenses more narrowly than the regulation.

Summary of Typical Allowable Health and Medical Care Expenses Services of medical professionals Substance abuse treatment programs Surgery and medical procedures that are Psychiatric treatment necessary, legal, and non-cosmetic Ambulance services and some costs of Services of medical facilities transportation related to medical expenses. The PHA will use the most Hospitalization, long-term care, and in- current medical mileage rate listed in home nursing services IRS Publication 502. Prescription medicines and insulin, but The cost and care of necessary not nonprescription medicines even if recommended by a doctor equipment related to a medical condition (e.g., eyeglasses/lenses, Improvements to housing directly related hearing aids, crutches, and artificial to medical needs (e.g., ramps for a teeth) wheelchair, handrails) The costs of buying, training, and Medical insurance premiums or the cost maintaining a guide dog or other service of a health maintenance organization animal to assist a visually impaired or (HMO) hearing disabled person, or a person Medicare Part B and Part D premiums with other physical disabilities. In general, this includes any costs, such as food, grooming, and veterinary care, incurred in maintaining the health and vitality of the service animal so that it may perform its duties. Note: This chart provides a summary of eligible health and medical care expenses only. In all cases, the PHA will consider whether health and medical expenses care expenses claimed by the family are eligible under HUD's definition.

Families That Qualify for Both Health and Medical and Disability Assistance Expenses

6-III.E. DISABILITY ASSISTANCE EXPENSES DEDUCTION [24 CFR 5.603(b) and

24 CFR 5.611(a)(3)(ii)] Unreimbursed reasonable expenses for attendant care and auxiliary apparatus for each member of the family who is a person with disabilities may be deducted if they: (1) Are necessary to enable a family member 18 years or older to work, (2) Are not paid to a family member or reimbursed by an outside source, (3) In combination with any medical expenses, exceed ten percent of annual income, and (4) Do not exceed the earned income received by the family member who is enabled to work. Earned Income Limit on the Disability Assistance Expense Deduction A family can qualify for the disability assistance expense deduction only if at least one family member (who may be the person with disabilities) is enabled to work [24 CFR 5.603(b)]. The disability expense deduction is capped by the amount of "earned income received by family members who are 18 years of age or older and who are able to work" because of the expense [24 CFR 5.611(a)(3)(ii)]. The earned income used for this purpose is the amount verified before any earned income disallowances or income exclusions are applied.

Eligible Attendant Care [Notice PIH 2023-27] Examples of attendant care expenses can include teaching a person with disabilities how to perform day-to-day tasks independently like cleaning, bathing, doing laundry, and cooking. Attendant care can be 24-hour care, or care during sporadic periods throughout the day. The family determines the type of attendant care that is appropriate for the person with disabilities.

6-III.F. CHILDCARE EXPENSE DEDUCTION

HUD defines childcare expenses at 24 CFR 5.603(b) as "amounts anticipated to be paid by the family for the care of children under 13 years of age (age 12 and younger) (including foster children) during the period for which annual income is computed, but only where such care is necessary to enable a family member to actively seek employment, be gainfully employed, or to further his or her education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for childcare. In the case of childcare necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income." Clarifying the Meaning of Child for This Deduction Childcare expenses do not include child support payments made to another on behalf of a minor who is not living in an assisted family's household [VG, p. 26]. However, childcare expenses for foster children that are living in the assisted family's household are included when determining the family's childcare expenses [HCV GB, p. 5-29]. Qualifying for the Deduction Determining Who Is Enabled to Pursue an Eligible Activity

Furthering Education

Eligible Childcare Expenses The type of care to be provided is determined by the assisted family. The PHA may not refuse to give a family the childcare expense deduction because there is an adult family member in the household that may be available to provide childcare [VG, p. 26]. Allowable Childcare Activities

6-III.G. HARDSHIP EXEMPTIONS [24 CFR 5.611(c), (d), and (e)]

Health and Medical Care and Disability Assistance Expenses [24 CFR 5.611(c); Notice PIH 2023-27] The regulations provide for two types of hardship exemption categories for families that qualify for unreimbursed health and medical care expenses and/or disability assistance expenses. A family will benefit from this hardship exemption only if the family has eligible expenses that can be deducted in excess of five percent of annual income. In order to claim unreimbursed health and medical care expenses, the family must have a head, cohead, or spouse that is elderly or a person with a disability. In order to claim unreimbursed reasonable attendant care and auxiliary apparatus expenses, the family must include a person with a disability, and the expenses must enable any member of the family (including the member who is a person with a disability) to be employed. Families may be eligible for relief under one of two categories; phased-in relief or general relief, as defined below. Phased-In Relief The first category is applicable to all families who received a deduction for unreimbursed health and medical care and/or reasonable attendant care or auxiliary apparatus expenses based on their most recent income review prior to January 1, 2024. The family must receive phased-in relief if they are determined to be eligible. These families will begin receiving a 24-month phased-in relief at their next annual or interim reexamination, whichever occurs first, after the date on which the PHA implements phased-in relief. For these families, the threshold amount is phased-in as follows:

• The family is eligible for a deduction totaling the sum of expenses that exceeds 5 percent of

annual income for the first 12 months.

• At the conclusion of 12 months, the family is eligible for a deduction totaling the sum of their

expenses that exceed 7.5 percent of annual income for another 12 months.

• At the conclusion of 24 months, the standard threshold amount of 10 percent would be used,

unless the family qualifies for relief under the general hardship relief category. - When an eligible family's phased-in relief begins at an interim reexamination, the PHA will need to process another transaction one year later to move the family along to the next phase. The transaction can be either an interim reexamination if triggered, or a non- interim reexamination transaction. When an eligible family's phased-in relief begins at an interim reexamination, the PHA must process another transaction (either an interim reexamination or non-interim transaction, as applicable) one year later to move the family to the next phase. Prior to the end of the 24-month period, the family may request a hardship exemption under the second category as described below. If the family is found eligible under the second category, the hardship exemption under the first category ends, and the family's hardship is administered

in accordance with the requirements listed below. Once a family requests general relief, the family may no longer receive phased-in relief.

PHAs must track the 24-month phase-period for each eligible family, even if a family's expenses go below the appropriate phase-in percentage, during the first or second 12-month phase-in period. The phase-in must continue for families who move to another public housing unit at the same PHA. When the family is treated as a new admission under a different property/program (e.g., the family moves from public housing to the HCV program), unless the PHA has a written policy to continue the phased-in relief upon admission, the family's expense deduction will be calculated using the 10-percent threshold unless request for general relief is approved by the PHA. When a family moves with continued assistance or ports to a new PHA, the family must continue to receive the phased-in relief. The family must receive the remaining calendar months of the percentage phase-in. The PHA must use the existing phase-in documentation to determine the remaining calendar months and the percentage phase-in.

• Their health and medical and/or disability assistance expenses increased (other than the

transition to the higher threshold); or

• The family's financial hardship is a result of a change in circumstances (as defined in PHA

policy) that would not otherwise trigger an interim reexamination. The family may request a hardship exemption under the second category regardless of whether the family previously received the health and medical and/or disability assistance deductions or are currently or were previously receiving relief under the phased-in relief category above. HUD requires that PHAs develop policies defining what constitutes a hardship for purposes of this exemption. The PHA must obtain third-party verification of the hardship or must document in the file the reason third-party verification was not available. PHAs must attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period.

The family is awaiting an eligibility determination for a federal, state, or local assistance program, such as a determination for unemployment compensation or disability benefits; The family's income decreased because of a loss of employment, death of a family member, or due to a natural or federal/state declared disaster; or Other circumstances as determined by the Authority. The family must provide third-party verification of the hardship with the request. If third- party verification is not available, the Authority will document the file with the reason and will attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period. The PHA must promptly notify the family in writing of the change in the determination of adjusted income and the family's rent resulting from hardship exemptions. The notice must inform the family of when the hardship exemption will begin and expire [24 CFR 5.611(e)(2)].

continues to request extensions prior to the end of each hardship exemption period. Families must report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. At any time, the Authority may terminate the hardship exemption if the Authority determines that the family no longer qualifies for the exemption. Childcare Expense Hardship Exemption [24 CFR 5.611(d) and Notice PIH 2023-27] A family whose eligibility for the childcare expense deduction is ending may request a financial hardship exemption to continue receiving the deduction. If the family demonstrates to the PHA's satisfaction that the family is unable to pay their rent because of the loss of the childcare expense deduction, and that the childcare expense is still necessary even though the family member is not working, looking for work, or seeking to further their education, the PHA must recalculate the family's adjusted income and continue the childcare deduction. The PHA must develop a policy to define what constitutes a hardship, which includes the family's inability to pay rent. The PHA must obtain third-party verification of the hardship or must document in the file the reason third-party verification was not available. PHAs must attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period.

The PHA must promptly notify the family in writing of the change in the determination of adjusted income and the family's rent resulting from hardship exemptions. If the PHA denies the request, the notice must specifically state the reason for the denial. PHAs must provide families 30 days' notice of any increase in rent. If the PHA approves the request, the notice must inform the family of when the hardship exemption will begin and expire [24 CFR 5.611(e)(2)]. The notice must also state the requirement for the family to report to the PHA if the circumstances that made the family eligible for relief are no longer applicable and that the family's adjusted income and tenant rent will be recalculated upon expiration of the hardship exemption [Notice PIH 2023-27].

hardship exemption period. Families must report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. At any time, the Authority may terminate the hardship exemption if the Authority determines that the family no longer qualifies for the exemption.

6-III.H. PERMISSIVE DEDUCTIONS [24 CFR 5.611(b)(1)(ii)]

The PHA may adopt additional permissive deductions from annual income if they establish a policy in the administrative plan. Permissive deductions are additional, optional deductions that may be applied to annual income. As with mandatory deductions, permissive deductions must be based on need or family circumstance and deductions must be designed to encourage self- sufficiency or other economic purpose. If the PHA offers permissive deductions, they must be granted to all families that qualify for them and should complement existing income exclusions and deductions [PH Occ GB, p. 128]. Permissive deductions may be used to incentivize or encourage self-sufficiency and economic mobility. A PHA that adopts such deductions must have sufficient funding to cover the increased housing assistance payment cost of the deductions. A PHA will not be eligible for an increase in HCV renewal funding for subsidy costs resulting from such deductions.

Part Iv: Calculating Family Share And Pha Subsidy

6-IV.A. OVERVIEW OF RENT AND SUBSIDY CALCULATIONS

TTP Formula [24 CFR 5.628] HUD regulations specify the formula for calculating the total tenant payment (TTP) for an assisted family. TTP is the highest of the following amounts, rounded to the nearest dollar:

• 30 percent of the family's monthly adjusted income (adjusted income is defined in Part II)
• 10 percent of the family's monthly gross income (annual income, as defined in Part I, divided

by 12)

• The welfare rent (in as-paid states only)
• A minimum rent between $0 and $50 that is established by the PHA

The PHA has authority to suspend and exempt families from minimum rent when a financial hardship exists, as defined in section 6-IV.B. The amount that a family pays for rent and utilities (the family share) will never be less than the family's TTP but may be greater than the TTP depending on the rent charged for the unit the family selects. Welfare Rent [24 CFR 5.628]

PHA Subsidy [24 CFR 982.505(b)] The PHA will pay a monthly housing assistance payment (HAP) for a family that is equal to the lower of (1) the applicable payment standard for the family minus the family's TTP or (2) the gross rent for the family's unit minus the TTP. (For a discussion of the application of payment standards, see section 6-IV.C.) Utility Reimbursement [24 CFR 982.514(b); 982.514(c)] When the PHA subsidy for a family exceeds the rent to owner, the family is due a utility reimbursement. HUD permits the PHA to pay the reimbursement to the family or directly to the utility provider.

6-IV.B. FINANCIAL HARDSHIPS AFFECTING MINIMUM RENT [24 CFR 5.630]

Example: Impact of Minimum Rent Exemption Assume the PHA has established a minimum rent of $50. Family Share – No Hardship Family Share – With Hardship $0 30% of monthly adjusted income $0 30% of monthly adjusted income $15 10% of monthly gross income $15 10% of monthly gross income N/A Welfare rent N/A Welfare rent $50 Minimum rent $50 Minimum rent Minimum rent applies. Hardship exemption granted. TTP = $50 TTP = $15

apply from the first of the month following the family's request until the end of the qualifying hardship. When the financial hardship has been determined to be long-term, the family is not required to repay the minimum rent.

6-IV.C. APPLYING PAYMENT STANDARDS [24 CFR 982.505; 982.503(b)]

Overview The PHA's schedule of payment standards is used to calculate housing assistance payments for HCV families. This section covers the application of the PHA's payment standards. The establishment and revision of the PHA's payment standard schedule are covered in Chapter 16. Payment standard is defined as "the maximum monthly assistance payment for a family assisted in the voucher program (before deducting the total tenant payment by the family)" [24 CFR 982.4(b)]. The payment standard for a family is the lower of (1) the payment standard for the family unit size, which is defined as the appropriate number of bedrooms for the family under the PHA's subsidy standards [24 CFR 982.4(b)], or (2) the payment standard for the size of the dwelling unit rented by the family. If the PHA has established an exception payment standard for a designated part of a zip code area or FMR area and a family's unit is located in the exception area, the PHA must use the appropriate payment standard for the exception area. The PHA is required to pay a monthly housing assistance payment (HAP) for a family that is the lower of (1) the payment standard for the family minus the family's TTP or (2) the gross rent for the family's unit minus the TTP. If during the term of the HAP contract for a family's unit, the owner lowers the rent, the PHA will recalculate the HAP using the lower of the initial payment standard or the gross rent for the unit [HCV GB, p. 7-8]. Changes in Payment Standards

When the PHA revises its payment standards during the term of the HAP contract for a family's unit, it will apply the new payment standards in accordance with HUD regulations. Decreases If a PHA changes its payment standard schedule, resulting in a lower payment standard amount, during the term of a HAP contract, the PHA is not required to reduce the payment standard used to calculate subsidy for families under HAP contract as long as the HAP contract remains in effect [FR Notice 11/16/16]. However, if the PHA does choose to reduce the payment standard for families currently under HAP contract, the initial reduction to the payment standard may not be applied any earlier than the effective date of the family's second regular reexamination following the effective date of the decrease in the payment standard amount. At that point, the PHA may either reduce the payment standard to the current amount in effect on the PHA's payment standard schedule, or may reduce the payment standard to another amount that is higher than the normally applicable amount on the schedule. The PHA may also establish different policies for designated areas within their jurisdiction (e.g., different zip code areas). In any case, the PHA must provide the family with at least 12 months' notice that the payment standard is being reduced before the effective date of the change. The PHA's policy on decreases in the payment standard during the term of the HAP contract apply to all families under HAP contract at the time of the effective date of the decrease in the payment standard within the designated area.

• If the family moves to a new unit, or a new HAP contract is executed due to

changes in the lease (even if the family remains in place) the current payment standard applicable to the family will be used when the new HAP contract is processed. Increases If the payment standard is increased during the term of the HAP contract, the increased payment standard will be used to calculate the monthly housing assistance payment for the family beginning on the effective date of the family's first regular reexamination on or after the effective date of the increase in the payment standard. Families requiring or requesting interim reexaminations will not have their HAP payments calculated using the higher payment standard until their next annual reexamination [HCV GB, p. 7-8].

Authority Policy

If the payment standard amount has increased, the increased payment standard will be applied at the first annual reexamination following the effective date of the increase in the payment standard. Changes in Family Unit Size (Voucher Size) Irrespective of any increase or decrease in the payment standard, if the family unit size increases or decreases during the HAP contract term, the new family unit size must be used to determine the payment standard for the family beginning at the family's first regular reexamination following the change in family unit size. Reasonable Accommodation If a family requires a higher payment standard as a reasonable accommodation for a family member who is a person with disabilities, the PHA is allowed to establish a higher payment standard for the family of not more than 120 percent of the published FMR.

6-IV.D. APPLYING UTILITY ALLOWANCES [24 CFR 982.517]

Overview A PHA-established utility allowance schedule is used in determining family share and PHA subsidy. A family's utility allowance is determined by the size of dwelling unit leased by a family or the voucher unit size for which the family qualifies using PHA subsidy standards, whichever is the lowest of the two. See Chapter 5 for information on the PHA's subsidy standards. For policies on establishing and updating utility allowances, see Chapter 16. Reasonable Accommodation and Individual Relief On request from a family that includes a person with disabilities, the PHA must approve a utility allowance which is higher than the applicable amount on the utility allowance schedule if a higher utility allowance is needed as a reasonable accommodation to make the program accessible and usable by the family member with a disability [24 CFR 982.517(e)]. (See Chapter 2 for policies regarding the request and approval of reasonable accommodations.) Further, the PHA may grant requests for individual relief from charges in excess of the utility allowance on reasonable grounds, such as special factors not within control of the resident, as the PHA deems appropriate. The family must request the higher allowance and provide the PHA an explanation of the need for individual relief and an explanation about the amount of additional allowance required [see HCV GB, p. 18-8]. PHAs should develop criteria for granting individual relief, notify residents about the availability of individual relief, and notify participants about the availability of individual relief programs (sometimes referred to as "Medical Baseline discounts") offered by the local utility company.

The Authority will consider the following criteria as valid reasons for granting individual relief: The family's consumption was mistakenly portrayed as excessive due to defects in the meter or errors in the meter reading. The excessive consumption is caused by a characteristic of the unit or owner- supplied equipment that is beyond the family's control, such as a particularly inefficient refrigerator or inadequate insulation. The allowance should be adjusted to reflect the higher consumption needs associated with the unit until the situation is remedied. The resident should be granted individual relief until the allowance is adjusted. The excessive consumption is due to special needs of the family that are beyond their control, such as the need for specialized equipment in the case of a family member who is ill, elderly, or who has a disability. In determining the amount of the reasonable accommodation or individual relief, the PHA will allow a reasonable measure of additional usage as necessary. To arrive at the amount of additional utility cost of specific equipment, the family may provide information from the manufacturer of the equipment, or the family or PHA may conduct an internet search for an estimate of usage or additional monthly cost. Information on reasonable accommodation and individual relief for charges in excess of the utility allowance will be provided to all families at admission as part of the information on payment standards and utility allowances in the briefing packet. The PHA will also provide information on utility relief programs or medical discounts (sometimes referred to as "Medical Baseline discounts") that may be available through local utility providers. At its discretion, the PHA may reevaluate the need for the increased utility allowance at any regular reexamination. If the excessive consumption is caused by a characteristic of the unit or PHA-supplied equipment that is beyond the family's control, such as a particularly inefficient refrigerator or inadequate insulation, the individual relief to the resident will cease when the situation is remedied. Utility Allowance Revisions At reexamination, the PHA must use the current utility allowance schedule [HCV GB, p. 18-8].

6-IV.E. PRORATED ASSISTANCE FOR MIXED FAMILIES [24 CFR 5.520]

HUD regulations prohibit assistance to ineligible family members. A mixed family is one that includes at least one U.S. citizen or eligible immigrant and any number of ineligible family members. The PHA must prorate the assistance provided to a mixed family. The PHA will first

determine assistance as if all family members were eligible and then prorate the assistance based upon the percentage of family members that actually are eligible. For example, if the PHA subsidy for a family is calculated at $500 and two of four family members are ineligible, the PHA subsidy would be reduced to $250.

EXHIBIT 6-1: ANNUAL INCOME FULL DEFINITION 24 CFR 5.609 (a) Annual income includes, with respect to (i) For an irrevocable trust or a revocable trust the family: outside the control of the family or household excluded from the definition of net family (1) All amounts, not specifically excluded in assets under § 5.603(b): paragraph (b) of this section, received from all sources by each member of the family who is (A) Distributions of the principal or corpus of 18 years of age or older or is the head of the trust; and household or spouse of the head of household, (B) Distributions of income from the trust plus unearned income by or on behalf of each when the distributions are used to pay the costs dependent who is under 18 years of age, and of health and medical care expenses for a (2) When the value of net family assets minor. exceeds the HUD-published threshold amount (which amount HUD will adjust annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers) and the actual returns from a given asset cannot be calculated, imputed returns on the asset based on the current passbook savings rate, as determined by HUD. (b)Annual income does not include the following: (1) Any imputed return on an asset when net family assets total are less than or equal to the HUD-published threshold amount (which amount HUD will adjust annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers) and no actual income from the net family assets can be determined. (2) The following types of trust distributions:

(ii) For a revocable trust under the control of (ii) Student financial assistance for tuition, the family or household, any distributions books, and supplies (including supplies and from the trust; except that any actual income equipment to support students with learning earned by the trust, regardless of whether it is disabilities or other disabilities), room and distributed, shall be considered income to the board, and other fees required and charged to a family at the time it is received by the trust. student by an institution of higher education (as defined under Section 102 of the Higher (3) Earned income of children under the 18 Education Act of 1965 (20 U.S.C. 1002)) and, years of age. for a student who is not the head of household (4) Payments received for the care of foster or spouse, the reasonable and actual costs of children or foster adults, or State or Tribal housing while attending the institution of kinship or guardianship care payments. higher education and not residing in an assisted unit. (5) Insurance payments and settlements for personal or property losses, including but not (A) Student financial assistance, for purposes limited to payments through health insurance, of this paragraph (9)(ii), means a grant or motor vehicle insurance, and workers' scholarship received from— ( compensation. 1) The Federal government; (6) Amounts received by the family that are (2) A State, Tribe, or local government; specifically for, or in reimbursement of, the cost of health and medical care expenses for (3) A private foundation registered as a any family member. nonprofit under 26 U.S.C. 501(c)(3); (7) Any amounts recovered in any civil action (4) A business entity (such as corporation, or settlement based on a claim of malpractice, general partnership, limited liability company, negligence, or other breach of duty owed to a limited partnership, joint venture, business family member arising out of law, that resulted trust, public benefit corporation, or nonprofit in a member of the family becoming disabled. entity); or (8) Income of a live-in aide, foster child, or (5) An institution of higher education. foster adult as defined in §§ 5.403 and 5.603, (B) Student financial assistance, for purposes respectively. of this paragraph (9)(ii), does not include— (9) (1) Any assistance that is excluded pursuant to (i) Any assistance that section 479B of the paragraph (b)(9)(i) of this section; Higher Education Act of 1965, as amended (20 (2) Financial support provided to the student in U.S.C. 1087uu), requires be excluded from a the form of a fee for services performed (e.g., family's income; and a work study or teaching fellowship that is not excluded pursuant to paragraph (b)(9)(i) of this section); ( 3) Gifts, including gifts from family or friends; or

(4) Any amount of the scholarship or grant (1) If the amount of assistance excluded under that, either by itself or in combination with paragraph (b)(9)(i) of this section is equal to or assistance excluded under this paragraph or exceeds the actual covered costs under paragraph (b)(9)(i), exceeds the actual covered paragraph (b)(9)(ii)(B)(4) of this section, none costs of the student. The actual covered costs of the assistance described in this paragraph of the student are the actual costs of tuition, (b)(9)(ii) of this section is considered student books and supplies (including supplies and financial assistance excluded from income equipment to support students with learning under this paragraph (b)(9)(ii)(E). disabilities or other disabilities), room and (2) If the amount of assistance excluded under board, or other fees required and charged to a paragraph (b)(9)(i) of this section is less than student by the education institution, and, for a the actual covered costs under paragraph student who is not the head of household or (b)(9)(ii)(B)(4) of this section, the amount of spouse, the reasonable and actual costs of assistance described in paragraph (b)(9)(ii) of housing while attending the institution of this section that is considered student financial higher education and not residing in an assistance excluded under this paragraph is the assisted unit. This calculation is described lower of: further in paragraph (b)(9)(ii)€ of this section. (i) the total amount of student financial (C) Student financial assistance, for purposes assistance received under this paragraph of this paragraph (b)(9)(ii) must be: (b)(9)(ii) of this section, or (1) Expressly for tuition, books, room and (ii) the amount by which the actual covered board, or other fees required and charged to a costs under paragraph (b)(9)(ii)(B)(4) of this student by the education institution; section exceeds the assistance excluded under (2) Expressly to assist a student with the costs paragraph (b)(9)(i) of this section. of higher education; or (10) Income and distributions from any (3) Expressly to assist a student who is not the Coverdell education savings account under head of household or spouse with the section 530 of the Internal Revenue Code of reasonable and actual costs of housing while 1986 or any qualified tuition program under attending the education institution and not section 529 of such Code; and income earned residing in an assisted unit. by government contributions to, and distributions from, "baby bond" accounts (D) Student financial assistance, for purposes created, authorized, or funded by Federal, of this paragraph (b)(9)(ii), may be paid State, or local government. directly to the student or to the educational institution on the student's behalf. Student (11) The special pay to a family member financial assistance paid to the student must be serving in the Armed Forces who is exposed to verified by the responsible entity as student hostile fire. financial assistance consistent with this (12) paragraph (b)(9)(ii). (i) Amounts received by a person with a (E) When the student is also receiving disability that are disregarded for a limited assistance excluded under paragraph (b)(9)(i) time for purposes of Supplemental Security of this section, the amount of student financial Income eligibility and benefits because they assistance under this paragraph (b)(9)(ii) is are set aside for use under a Plan to Attain determined as follows: Self-Sufficiency (PASS);

(ii) Amounts received by a participant in other (16) Deferred periodic amounts from publicly assisted programs which are Supplemental Security Income and Social specifically for or in reimbursement of out-of- Security benefits that are received in a lump pocket expenses incurred (e.g., special sum amount or in prospective monthly equipment, clothing, transportation, childcare, amounts, or any deferred Department of etc.) and which are made solely to allow Veterans Affairs disability benefits that are participation in a specific program; received in a lump sum amount or in prospective monthly amounts. (iii) Amounts received under a resident service stipend not to exceed $200 per month. A (17) Payments related to aid and attendance resident service stipend is a modest amount under 38 U.S.C. 1521 to veterans in need of received by a resident for performing a service regular aid and attendance. for the PHA or owner, on a part-time basis, (18) Amounts received by the family in the that enhances the quality of life in the form of refunds or rebates under State or local development. law for property taxes paid on the dwelling (iv) Incremental earnings and benefits unit. resulting to any family member from (19) Payments made by or authorized by a participation in training programs funded by State Medicaid agency (including through a HUD or in qualifying Federal, State, Tribal, or managed care entity) or other State or Federal local employment training programs agency to a family to enable a family member (including training programs not affiliated who has a disability to reside in the family's with a local government) and training of a assisted unit. Authorized payments may family member as resident management staff. include payments to a member of the assisted Amounts excluded by this provision must be family through the State Medicaid agency received under employment training programs (including through a managed care entity) or with clearly defined goals and objectives and other State or Federal agency for caregiving are excluded only for the period during which services the family member provides to enable the family member participates in the a family member who has a disability to reside employment training program unless those in the family's assisted unit. amounts are excluded under paragraph (b)(9)(i) of this section. (20) Loan proceeds (the net amount disbursed by a lender to or on behalf of a borrower, (13) Reparation payments paid by a foreign under the terms of a loan agreement) received government pursuant to claims filed under the by the family or a third party (e.g., proceeds laws of that government by persons who were received by the family from a private loan to persecuted during the Nazi era. enable attendance at an educational institution (14) Earned income of dependent fulltime or to finance the purchase of a car). students in excess of the amount of the (21) Payments received by Tribal members as deduction for a dependent in § 5.611. a result of claims relating to the (15) Adoption assistance payments for a child mismanagement of assets held in trust by the in excess of the amount of the deduction for a United States, to the extent such payments are dependent in § 5.611. also excluded from gross income under the Internal Revenue Code or other Federal law.

(22) Amounts that HUD is required by Federal (iv) Amounts directly received by the family statute to exclude from consideration as as a result of Federal refundable tax credits income for purposes of determining eligibility and Federal tax refunds at the time they are or benefits under a category of assistance received. programs that includes assistance under any (v) Gifts for holidays, birthdays, or other program to which the exclusions set forth in significant life events or milestones (e.g., paragraph (b) of this section apply. HUD will wedding gifts, baby showers, anniversaries). publish a notice in the Federal Register to identify the benefits that qualify for this (vi) Non-monetary, in-kind donations, such as exclusion. Updates will be published when food, clothing, or toiletries, received from a necessary. food bank or similar organization. (23) Replacement housing "gap" payments (vii) Lump-sum additions to net family assets, made in accordance with 49 CFR part 24 that including but not limited to lottery or other offset increased out of pocket costs of contest winnings. displaced persons that move from one (25) Civil rights settlements or judgments, federally subsidized housing unit to another including settlements or judgments for back Federally subsidized housing unit. Such pay. replacement housing "gap" payments are not excluded from annual income if the increased (26) Income received from any account under cost of rent and utilities is subsequently a retirement plan recognized as such by the reduced or eliminated, and the displaced Internal Revenue Service, including individual person retains or continues to receive the retirement arrangements (IRAs), employer replacement housing "gap" payments. retirement plans, and retirement plans for self- employed individuals; except that any (24) Nonrecurring income, which is income distribution of periodic payments from such that will not be repeated in the coming year accounts shall be income at the time they are based on information provided by the family. received by the family. Income received as an independent contractor, day laborer, or seasonal worker is not excluded (27) Income earned on amounts placed in a from income under this paragraph, even if the family's Family Self Sufficiency Account. source, date, or amount of the income varies. (28) Gross income a family member receives Nonrecurring income includes: through self-employment or operation of a (i) Payments from the U.S. Census Bureau for business; except that the following shall be employment (relating to decennial census or considered income to a family member: the American Community Survey) lasting no (i) Net income from the operation of a longer than 180 days and not culminating in business or profession. Expenditures for permanent employment. business expansion or amortization of capital (ii) Direct Federal or State payments intended indebtedness shall not be used as deductions in for economic stimulus or recovery. determining net income. An allowance for depreciation of assets used in a business or (iii) Amounts directly received by the family profession may be deducted, based on straight as a result of State refundable tax credits or line depreciation, as provided in Internal State tax refunds at the time they are received. Revenue Service regulations; and

(ii) Any withdrawal of cash or assets from the withdrawal is reimbursement of cash or assets operation of a business or profession will be invested in the operation by the family. included in income, except to the extent the

EXHIBIT 6-2: TREATMENT OF FAMILY ASSETS 24 CFR 5.603(b) Net Family Assets (1) Net family assets is the net cash value of arrangements (IRAs), employer retirement all assets owned by the family, after plans, and retirement plans for self- deducting reasonable costs that would be employed individuals; (iv) The value of real incurred in disposing real property, savings, property that the family does not have the stocks, bonds, and other forms of capital effective legal authority to sell in the investment. jurisdiction in which the property is located; (v) Any amounts recovered in any civil (2) In determining net family assets, PHAs action or settlement based on a claim of or owners, as applicable, must include the malpractice, negligence, or other breach of value of any business or family assets duty owed to a family member arising out of disposed of by an applicant or tenant for less law, that resulted in a family member being than fair market value (including a a person with a disability; (vi) The value of disposition in trust, but not in a foreclosure any Coverdell education savings account or bankruptcy sale) during the two years under section 530 of the Internal Revenue preceding the date of application for the Code of 1986, the value of any qualified program or reexamination, as applicable, in tuition program under section 529 of such excess of the consideration received Code, the value of any Achieving a Better therefor. In the case of a disposition as part Life Experience (ABLE) account authorized of a separation or divorce settlement, the under Section 529A of such Code, and the disposition will not be considered to be for value of any "baby bond" account created, less than fair market value if the applicant or authorized, or funded by Federal, State, or tenant receives consideration not measurable local government. (vii) Interests in Indian in dollar terms. Negative equity in real trust land; (viii) Equity in a manufactured property or other investments does not home where the family receives assistance prohibit the owner from selling the property under 24 CFR part 982; (ix) Equity in or other investments, so negative equity property under the Homeownership Option alone would not justify excluding the for which a family receives assistance under property or other investments from family 24 CFR part 982; (x) Family Self- assets. Sufficiency Accounts; and (xi) Federal tax (3) Excluded from the calculation of net refunds or refundable tax credits for a period family assets are: (i) The value of necessary of 12 months after receipt by the family. items of personal property; (ii) The (4) In cases where a trust fund has been combined value of all nonnecessary items of established and the trust is not revocable by, personal property if the combined total value or under the control of, any member of the does not exceed the HUD-published family or household, the trust fund is not a threshold amount (which amount will be family asset and the value of the trust is not adjusted by HUD in accordance with the included in the calculation of net family Consumer Price Index for Urban Wage assets, so long as the fund continues to be Earners and Clerical Workers); (iii) The held in a trust that is not revocable by, or value of any account under a retirement plan under the control of, any member of the recognized as such by the Internal Revenue family or household. Service, including individual retirement

EXHIBIT 6-3: THE EFFECT OF WELFARE BENEFIT REDUCTION 24 CFR 5.615 Public housing program and Section 8 tenant-based assistance program: How welfare benefit reduction affects family income. (a) Applicability. This section applies to covered families who reside in public housing (part 960 of this title) or receive Section 8 tenant-based assistance (part 982 of this title). (b) Definitions. The following definitions apply for purposes of this section: Covered families. Families who receive welfare assistance or other public assistance benefits ("welfare benefits") from a State or other public agency ("welfare agency") under a program for which Federal, State, or local law requires that a member of the family must participate in an economic self-sufficiency program as a condition for such assistance. Economic self-sufficiency program. See definition at Sec. 5.603. Imputed welfare income. The amount of annual income not actually received by a family, as a result of a specified welfare benefit reduction, that is nonetheless included in the family's annual income for purposes of determining rent. Specified welfare benefit reduction. (1) A reduction of welfare benefits by the welfare agency, in whole or in part, for a family member, as determined by the welfare agency, because of fraud by a family member in connection with the welfare program; or because of welfare agency sanction against a family member for noncompliance with a welfare agency requirement to participate in an economic self-sufficiency program. (2) "Specified welfare benefit reduction" does not include a reduction or termination of welfare benefits by the welfare agency: (i) at expiration of a lifetime or other time limit on the payment of welfare benefits; (ii) because a family member is not able to obtain employment, even though the family member has complied with welfare agency economic self-sufficiency or work activities requirements; or (iii) because a family member has not complied with other welfare agency requirements. (c) Imputed welfare income. (1) A family's annual income includes the amount of imputed welfare income (because of a specified welfare benefits reduction, as specified in notice to the PHA by the welfare agency), plus the total amount of other annual income as determined in accordance with Sec. 5.609. (2) At the request of the PHA, the welfare agency will inform the PHA in writing of the amount and term of any specified welfare benefit reduction for a family member, and the reason for such reduction, and will also inform the PHA of any subsequent changes in the term or amount of such specified welfare benefit reduction. The PHA will use this information to determine the amount of imputed welfare income for a family.

(3) A family's annual income includes imputed welfare income in family annual income, as determined at the PHA's interim or regular reexamination of family income and composition, during the term of the welfare benefits reduction (as specified in information provided to the PHA by the welfare agency). (4) The amount of the imputed welfare income is offset by the amount of additional income a family receives that commences after the time the sanction was imposed. When such additional income from other sources is at least equal to the imputed (5) The PHA may not include imputed welfare income in annual income if the family was not an assisted resident at the time of sanction. (d) Review of PHA decision. (1) Public housing. If a public housing tenant claims that the PHA has not correctly calculated the amount of imputed welfare income in accordance with HUD requirements, and if the PHA denies the family's request to modify such amount, the PHA shall give the tenant written notice of such denial, with a brief explanation of the basis for the PHA determination of the amount of imputed welfare income. The PHA notice shall also state that if the tenant does not agree with the PHA determination, the tenant may request a grievance hearing in accordance with part 966, subpart B of this title to review the PHA determination. The tenant is not required to pay an escrow deposit pursuant to Sec. 966.55(e) for the portion of tenant rent attributable to the imputed welfare income in order to obtain a grievance hearing on the PHA determination. (2) Section 8 participant. A participant in the Section 8 tenant-based assistance program may request an informal hearing, in accordance with Sec. 982.555 of this title, to review the PHA determination of the amount of imputed welfare income that must be included in the family's annual income in accordance with this section. If the family claims that such amount is not correctly calculated in accordance with HUD requirements, and if the PHA denies the family's request to modify such amount, the PHA shall give the family written notice of such denial, with a brief explanation of the basis for the PHA determination of the amount of imputed welfare income. Such notice shall also state that if the family does not agree with the PHA determination, the family may request an informal hearing on the determination under the PHA hearing procedure. (e) PHA relation with welfare agency. (1) The PHA must ask welfare agencies to inform the PHA of any specified welfare benefits reduction for a family member, the reason for such reduction, the term of any such reduction, and any subsequent welfare agency determination affecting the amount or term of a specified welfare benefits reduction. If the welfare agency determines a specified welfare benefits reduction for a family member, and gives the PHA written notice of such reduction, the family's annual incomes shall include the imputed welfare income because of the specified welfare benefits reduction. (2) The PHA is responsible for determining the amount of imputed welfare income that is included in the family's annual income as a result of a specified welfare benefits reduction as determined by the welfare agency, and specified in the notice by the welfare agency to the PHA. However, the PHA is not responsible for determining whether a reduction of welfare benefits by the welfare agency was correctly determined by the welfare agency in accordance with welfare

program requirements and procedures, nor for providing the opportunity for review or hearing on such welfare agency determinations. (3) Such welfare agency determinations are the responsibility of the welfare agency, and the family may seek appeal of such determinations through the welfare agency's normal due process procedures. The PHA shall be entitled to rely on the welfare agency notice to the PHA of the welfare agency's determination of a specified welfare benefits reduction.

INCOME AND SUBSIDY DETERMINATIONS UNDER HOTMA 102/104

[24 CFR Part 5, Subparts E and F; 24 CFR 982]

INTRODUCTION This chapter is applicable upon the Authority's HOTMA 102/104 compliance date. Prior to this date, the Authority will follow policies as outlined in Chapter 6.A. A family's income determines eligibility for assistance and is also used to calculate the family's payment and the PHA's subsidy. The PHA will use the policies and methods described in this chapter to ensure that only eligible families receive assistance and that no family pays more or less than its obligation under the regulations. This chapter describes HUD regulations and PHA policies related to these topics in four parts as follows: Part I: Annual Income. HUD regulations specify the sources of income which are excluded from the family's annual income. These requirements and PHA policies for calculating annual income are found in Part I. Part II: Assets. HUD regulations specify the types of assets which are excluded from a family's annual income. These requirements and PHA policies for calculating income from assets are found in Part II. Part III: Adjusted Income. Once annual income has been established, HUD regulations require the PHA to subtract from annual income any of five mandatory deductions for which a family qualifies and allow the PHA to adopt additional permissive deductions. These requirements and PHA policies for calculating adjusted income are found in Part IV: Calculating Family Share and PHA Subsidy. This part describes the statutory formula for calculating total tenant payment (TTP), the use of utility allowances, and the methodology for determining PHA subsidy and required family payment.

Part I: Annual Income

6-I.A. OVERVIEW [24 CFR 5.609]

Annual income includes:

• All amounts, not specifically excluded in 24 CFR 5.609(b);
• All amounts received from all sources (other than those specifically excluded in 24 CFR

5.609(b)) by each member of the family who is 18 years of age or older or is the head of household or spouse;

• Unearned income (other than those sources specifically excluded in 24 CFR 5.609(b)) by or

on behalf of each dependent who is under 18 years of age; and

• Imputed returns of an asset based on the current passbook savings rate, as determined by

HUD, when the value of net family assets exceeds the HUD-published threshold amount (adjusted annually and published in the HUD's Inflation-Adjusted Values tables) and the actual returns from a given asset cannot be calculated. In addition to this general definition, the regulations at 24 CFR 5.609(b) provide a comprehensive listing of all sources of income that are excluded from annual income. Note, unlike in previous versions of the regulations, the current regulations governing annual income do not list sources of income that are to be included. Instead, HUD relies on the definition of excluded income under 24 CFR 5.609(b) to provide the scope of what is included. To that end, generally, all income is included unless it is specifically excluded by regulation. Annual income includes "all amounts received," not the amount that a family may be legally entitled to receive but did not receive. For example, a family's child support or alimony income must be based on payments received, not the amounts to which the family is entitled by court or agency orders. However, when a family member's wages or benefits are garnished, levied, or withheld to pay restitution, child support, tax debt, student loan debt, or other applicable debts, the PHA must use the gross amount of the income, prior to the reduction, to determine a family's annual income [Notice PIH 2023-27]. Annual income also includes all actual anticipated income from assets (provided the income is not otherwise excluded) even if the asset itself is excluded from net family assets [Notice PIH 2023-27]. 24 CFR 5.603(b)(1) describes HUD regulations for treating specific types of income and assets. The full texts of those portions of the regulations are provided in exhibits at the end of this chapter as follows:

• Annual Income Full Definition (Exhibit 6-1)
• Treatment of Family Assets (Exhibit 6-2)
• The Effect of Welfare Benefit Reduction (Exhibit 6-3)

Sections 6-I.B and 6-I.C discuss general requirements and methods for calculating annual income. The rest of this section describes how each source of income is treated for the purposes of determining annual income. Verification requirements for annual income are discussed in

6-I.B. HOUSEHOLD COMPOSITION AND INCOME

Overview Income received by all family members must be counted unless specifically excluded by the regulations. It is the responsibility of the head of household to report changes in family composition in accordance with HUD regulations and PHA policies in Chapter 11. The rules on which sources of income are counted vary somewhat by family member. The chart below summarizes how family composition affects income determinations.

Summary of Income Included and Excluded by Person Live-in aides Income from all sources (both earned and unearned) is excluded [24 CFR 5.609(b)(8)]. Foster child or foster adult Income from all sources (both earned and unearned) is excluded [24 CFR 5.609(b)(8)]. Head, spouse, or cohead All sources of income not specifically excluded by the Other adult family members regulations are included [24 CFR 5.609(a)]. Minors Earned income of children under 18 years of age is excluded [24 CFR 5.609(b)(3)]. All sources of unearned income, except those specifically excluded by the regulations, are included [24 CFR 5.609(a)]. Full-time students 18 years of Earned income in excess of the dependent deduction is age or older (not head, spouse, excluded [24 CFR 5.609(b)(14)]. or cohead) All sources of unearned income, except those specifically excluded by the regulations, are included.

Temporarily Absent Family Members The current regulations governing annual income do not specifically address temporarily absent family members. The regulations also do not define "temporarily" or "permanently" absent or specify a timeframe associated with a temporary versus a permanent absence.

Return of Permanently Absent Family Members

Family Members Permanently Confined for Medical Reasons If a family member is confined to a nursing home or hospital on a permanent basis, that person is no longer considered a family member and the income of that person is not counted [HCV GB, p. 5-22].

Caretakers for a Child

6-I.C. CALCULATING ANNUAL INCOME

The methodology used for calculating income differs depending on whether income is being calculated at initial occupancy, interim reexamination, or at annual reexamination. However, income from assets is always anticipated regardless of certification type. Anticipating Annual Income [24 CFR 5.609(c)(1)] At initial occupancy and for an interim reexamination of family income, the PHA is required to use anticipated income (current income) for the upcoming 12-month period following the new admission or interim reexamination effective date. Policies related to verifying income are found in Chapter 7.

Calculating Annual Income at Annual Reexamination [24 CFR.609(c)(2); Notice PIH 2023-27] At annual reexamination, except where the PHA uses a streamlined income determination, PHAs must first determine the family's income for the previous 12-month period and use this amount as the family income for annual reexaminations; however, adjustments to reflect current income must be made. Any change of income since the family's last annual reexamination, including those that did not meet the threshold to process an interim reexamination of family income in accordance with PHA policies in Chapter 11 and HUD regulations, must be considered. If, however, there have been no changes to income, then the amount of income calculated for the previous 12-month period is the amount that will be used to determine the family's rental assistance. Income from assets is always anticipated, irrespective of the income examination type. Policies related to conducting annual reexaminations are located in Chapter 11.

6-I.D. EARNED INCOME

Wages and Related Compensation [24 CFR 5.609(a); Notice PIH 2023-27] The earned income of each member of the family who is 18 years of age or older, or who is the head of household or spouse/cohead regardless of age, is included in annual income. Income received as a day laborer or seasonal worker is also included in annual income, even if the source, date, or amount of the income varies [24 CFR 5.609 (b)(24)]. Earned income means income or earnings from wages, tips, salaries, other employee compensation, and net income from self-employment. Earned income does not include any pension or annuity, transfer payments (meaning payments made or income received in which no goods or services are being paid for, such as welfare, social security, and governmental subsidies for certain benefits), or any cash or in-kind benefits [24 CFR 5.100]. Earned income also includes independent contracted work such as Lyft, Uber, Uber Eats, GoFundMe accounts, and other such income. A day laborer is defined as an individual hired and paid one day at a time without an agreement that the individual will be hired or work again in the future [24 CFR 5.603(b)]. Income earned as a day laborer is not considered nonrecurring income. A seasonal worker is defined as an individual who is hired into a short-term position (e.g., for which the customary employment period for the position is six months or fewer) and the employment begins about the same time each year (such as summer or winter). Typically, the individual is hired to address seasonal demands that arise for the particular employer or industry [24 CFR 5.603(b)]. Some examples of seasonal work include employment limited to holidays or agricultural seasons. Seasonal work may include but is not limited to employment as a lifeguard, ballpark vendor, or snowplow driver [Notice PIH 2023-27]. Income earned as a seasonal worker is not considered nonrecurring income.

reexamination. If only a one-year history is available, the Authority will use the prior year amounts. In either case the family may provide, and the Authority will consider, a credible justification for not using this history to anticipate future bonuses or commissions. If a new employee has not yet received any bonuses or commissions, the PHA will count only the amount estimated by the employer. The file will be documented appropriately. Military Pay All regular pay, special pay and allowances of a member of the Armed Forces are counted except for the special pay to a family member serving in the Armed Forces who is exposed to hostile fire [24 CFR 5.609(b)(11)]. Earnings of a Minor [24 CFR 5.609(b)(3)] A minor is a member of the family, other than the head of household or spouse, who is under 18 years of age. Employment income earned by minors is not included in annual income. All other sources of unearned income, except those specifically excluded by the regulations, are included. Earned Income of Full-Time Students [24 CFR 5.609(b)(14)] The earned income of a dependent full-time student in excess of the amount of the dependent deduction is excluded from annual income. All sources of unearned income, except those specifically excluded by the regulations, are included. A family member other than the head of household or spouse/cohead is considered a full-time student if they are attending school or vocational training on a full-time basis [24 CFR 5.603(b)]. To be considered "full-time," a student must be considered "full-time" by an educational institution with a degree or certificate program [HCV GB, p. 5-29].

6-I.E. EARNED INCOME DISALLOWANCE FOR PERSONS WITH DISABILITIES

[24 CFR 5.617; Streamlining Final Rule (SFR) Federal Register 3/8/16; Notice PIH 2023-27] HOTMA removed the statutory authority for the EID. The EID is available only to families that are eligible for and participating on the program as of December 31, 2023, or before; no new families may be added on or after January 1, 2024. If a family is receiving the EID prior to or on the effective date of December 31, 2023, they are entitled to the full amount of the benefit for a full 24-month period. The policies below are applicable only to such families. No family will still be receiving the EID after December 31, 2025. The EID will sunset on January 1, 2026, and the PHA policies below will no longer be applicable as of that date or when the last qualifying family exhausts their exclusion period, whichever is sooner. Calculation of the Disallowance Calculation of the earned income disallowance for an eligible member of a qualified family begins with a comparison of the member's current income with their "baseline income." The family member's baseline income is their income immediately prior to qualifying for the EID. The family member's baseline income remains constant throughout the period that they are participating in the EID.

Calculation Method Initial 12-Month Exclusion During the initial exclusion period of 12 consecutive months, the full amount (100 percent) of any increase in income attributable to new employment or increased earnings is excluded.

6-I.F. BUSINESS AND SELF-EMPLOYMENT INCOME [24 CFR 5.609(b)(28);

Notice PIH 2023-27] Annual income includes "net income from the operation of a business or profession. Net income is gross income minus business expenses that allows the business to operate. Gross income is all income amounts received into the business, prior to the deduction of business expenses. Expenditures for business expansion or amortization of capital indebtedness may not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family."

Independent Contractors Income received as an independent contractor is included in annual income, even if the source, date, or amount of the income varies [24 CFR 5.609 (b)(24)]. An independent contractor is defined as an individual who qualifies as an independent contractor instead of an employee in accordance with the Internal Revenue Code Federal income tax requirements and whose earnings are consequently subject to the Self-Employment Tax. In general, an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done [24 CFR 5.603(b)]. This may include individuals such as third-party delivery and transportation service providers and "gig workers" like babysitters, landscapers, rideshare drivers, and house cleaners. Income earned as an independent contractor is not considered nonrecurring income. Business Expansion HUD regulations do not permit the PHA to deduct from gross income expenses for business expansion.

repaid. Investments do not include the value of labor contributed to the business without compensation. Co-owned Businesses

6-I.G. STUDENT FINANCIAL ASSISTANCE [FR Notice 2/14/23 and Notice PIH 2023-27]

The treatment of student financial assistance depends on the HUD program, student/household characteristics, and the type of financial assistance received by the student. For public housing residents, all income received under Title IV of the HEA must be excluded from income. Other student financial assistance may be included depending on the students actual covered costs. For section 8 programs, including HCV, however, for over 10 years HUD appropriations have included a provision that for Section 8 students who are age 23 and under and without dependent children, any amounts received in excess of tuition and any other required fees and charges must be considered income. Under HOTMA, HUD has interpreted this limitation to apply when the student is head of household or spouse, but not when the student resides with their parents [71 FR 18146]. For any funds from a year where HUD's appropriations continue to include this Section 8 student financial assistance limitation, if the student does not reside with their parents is the head of household, cohead, or spouse, and is under the age of 23 or without dependent children, then both the assistance received under Title IV HEA and other student financial assistance received by the student is included as income to the extent that it exceeds the total of tuition and any other required fees and charges. In contrast, student financial assistance received by a Section 8 student who is the head of household, spouse, or cohead, and is over the age of 23 with dependent children, or a student who resides with their parents in a Section 8 unit, is governed by HOTMA student rule, which is described below. During years in which an appropriations act does not contain this Section 8 student financial assistance limitation (or any other such limitation), then the determination of student financial assistance for all Section 8 students defaults to the methodology for public housing. HOTMA Student Financial Assistance Requirements [24 CFR 5.609(b)(9)] The regulations under HOTMA distinguish between two categories of student financial assistance paid to both full-time and part-time students. The first category is any assistance to students under section 479B of the Higher Education Act of 1965 (Title IV of the HEA) which must be excluded from the family's annual income [24 CFR 5.609(b)(9)(i)]. Examples of assistance under title IV of the HEA include:

• Federal Pell Grants;
• Teach Grants;
• Federal Work Study Programs;
• Federal Perkins Loans;
• Income earned in employment and training programs under section 134 of the Workforce

Innovation and Opportunity Act (WIOA); or

• Bureau of Indian Affairs/Education student assistance programs

- The Higher Education Tribal Grant

- The Tribally Controlled Colleges or Universities Grant Program The second category is any other grant-in-aid, scholarship, or other assistance amounts an individual receives for the actual covered costs charged by the institute of higher education (not otherwise excluded by the Federally mandated income exclusions) [24 CFR 5.609(b)(9)(ii)]. Other student financial assistance received by the student that, either by itself or in combination with HEA assistance, exceeds the actual covered costs is not excluded from income. Actual covered costs are defined as the actual costs of:

• Tuition, books, and supplies;

- Including supplies and equipment to support students with learning disabilities or other disabilities

• Room and board; and
• Other fees required and charged to a student by the education institution.

For a student who is not the head of household or spouse/cohead, actual covered costs also include the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit. Further, to qualify, other student financial assistance must be expressly:

• For tuition, book, supplies, room and board, or other fees required and charged to the student

by the educational institution;

• To assist a student with the costs of higher education; or
• To assist a student who is not the head of household or spouse with the reasonable and actual

costs of housing while attending the educational institution and not residing in an assisted unit. The student financial assistance may be paid directly to the student or to the educational institution on the student's behalf. However, any student financial assistance paid to the student must be verified by the PHA. The financial assistance must be a grant or scholarship received from:

• The Federal government;
• A state, tribal, or local government ;
• A private foundation registered as a nonprofit;
• A business entity (such as corporation, general partnership, limited liability company, limited

partnership, joint venture, business trust, public benefit corporation, or nonprofit entity); or

• An institution of higher education.

Student financial assistance, does not include:

• Financial support provided to the student in the form of a fee for services performed; (e.g., a

work study or teaching fellowship that is not excluded under section 479B of the Higher Education Act HEA);

• Gifts, including gifts from family or friends; or
• Any amount of the scholarship or grant that, either by itself or in combination with assistance

excluded under the HEA, exceeds the actual covered costs of the student. Calculating Income from Student Financial Assistance [HOTMA Student Financial Assistance Resource Sheet; Notice PIH 2023-27] There are two steps required as part of the calculation for Section 8 students. First, determine the student's relationship to the household, age, and whether they have dependent children. Second, calculate whether any excess student financial assistance should be included in the family's income. If the student does not live with their parents and is the head of household, cohead, or spouse, and is 23 or younger or does not have dependent children, then Title IV HEA assistance is considered when determining the student's total financial aid amount. Subtract the total tuition plus required fees and charges from the total student financial assistance (Title IV HEA assistance and any other student financial assistance). If the total tuition plus required fees and

charges is zero or exceeds the amount of total financial assistance from all sources, then no student financial assistance is included in annual income. Any amount of student financial assistance that exceeds the total tuition plus required fees and charges must be included in the annual income. If the student either lives with their parents or is over 23 with dependent children, then the calculation will use the HOTMA methodology for calculating financial assistance, which always begins with deducting the assistance received under 479B of the HEA from the total actual covered costs, because the 479B assistance is intended to pay the student's actual covered costs. When a student receives assistance from both Title IV of the HEA and from other sources, the assistance received under Title IV of the HEA must be applied to the student's actual covered costs first and then other student financial assistance is applied to any remaining actual covered costs. Once actual costs are covered, any remaining student financial assistance is considered income.

6-I.H. PERIODIC PAYMENTS

Periodic payments are forms of income received on a regular basis. Income that will not be repeated beyond the coming year (i.e., the 12 months following the effective date of the certification), based on information provided by the family, is considered nonrecurring income and is excluded from annual income. Income that has a discrete end date and will not be repeated beyond the coming year is excluded from a family's annual income because it is nonrecurring income. For example, a family receives income from a guaranteed income program in their city that has a discrete beginning and end date. While the guaranteed income will be repeated in the coming year, it will end before the family's next annual reexamination. This income is fully excluded from annual income. However, this does not include unemployment income and other types of periodic payments that are received at regular intervals (such as weekly, monthly, or yearly) Unemployment income and other types of periodic payments are not considered nonrecurring income, unless explicitly excluded from income under 25 CFR 5.609(b), and thus they are included in annual income. Insurance payments and settlements for personal or property losses, including but not limited to payments under health insurance, motor vehicle insurance, and workers' compensation, are excluded from annual income. Any workers' compensation is always excluded from annual income, regardless of the frequency or length of the payments. Lump-Sum Payments for the Delayed Start of a Periodic Payment [24 CFR 5.609(b)(16)] Deferred periodic amounts from Supplemental Security Income (SSI) and Social Security benefits that are received in a lump sum amount or in prospective monthly amounts, or any deferred Department of Veterans Affairs (VA) disability benefits that are received in a lump sum amount or in prospective monthly amounts are excluded from annual income.

Retirement Accounts [24 CFR 5.609(b)(26); Notice PIH 2023-27] Income received from any account under a retirement plan recognized as such by the IRS, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals is not considered actual income from assets. However, any distribution of periodic payments from such accounts is included in annual income at the time they are received by the family. An asset moved to a retirement account held by a member of the family is not considered to be an asset disposed of for less than fair market value. Social Security Benefits [Notice PIH 2018-24] The PHA is required to use the gross benefit amount to calculate annual income from Social Security benefits. Annually in October, the Social Security Administration (SSA) announces the cost-of-living adjustment (COLA) by which federal Social Security and SSI benefits are adjusted to reflect the increase, if any, in the cost of living. The federal COLA does not apply to state-paid disability benefits. Effective the day after the SSA has announced the COLA, PHAs are required to factor in the COLA when determining Social Security and SSI annual income for all annual reexaminations and interim reexaminations of family income that have not yet been completed and will be effective January 1 or later of the upcoming year [Notice PIH 2023-27]. When a family member's benefits are garnished, levied, or withheld to pay restitution, child support, tax debt, student loan debt, or other debts, the PHA must use the gross amount of the income, prior to the reduction, to determine a family's annual income.

Alimony and Child Support

6-I.I. NONRECURRING INCOME [24 CFR 5.609(b)(24) and Notice PIH 2023-27]

Income received as an independent contractor, day laborer, or seasonal worker is not excluded from income as nonrecurring income, even if the source, date, or amount of the income varies. Income that has a discrete end date and will not be repeated beyond the coming year during the family's upcoming annual reexamination period will be excluded from a family's annual income as nonrecurring income. This exclusion does not include unemployment income and other types of periodic payments that are received at regular intervals (such as weekly, monthly, or yearly). Income amounts excluded under this category may include, but are not limited to:

• Nonrecurring payments made to the family or to a third party on behalf of the family to assist

with utilities;

• Payments for eviction prevention;
• Security deposits to secure housing;
• Payments for participation in research studies (depending on the duration); and
• General one-time payments received by or on behalf of the family.

Nonrecurring income that is excluded under the regulations includes:

• Payments from the U.S. Census Bureau for employment (relating to decennial census or the

American Community Survey) lasting no longer than 180 days and not culminating in permanent employment [24 CFR 5.609(b)(24)(i)].

• Direct federal or state payments intended for economic stimulus or recovery [24 CFR

5.609(b)(24)(ii)].

• Amounts directly received by the family as a result of state refundable tax credits or state or

federal tax refunds at the time they are received [24 CFR 5.609(b)(24)(iii) and (iv)].

• Gifts for holidays, birthdays, or other significant life events or milestones (e.g., wedding

gifts, baby showers, anniversaries) [24 CFR 5.609(b)(24)(v)].

• Non-monetary, in-kind donations, such as food, clothing, or toiletries, received from a food

bank or similar organization [24 CFR 5.609(b)(24)(vi)]. When calculating annual income, PHAs are prohibited from assigning monetary value to such non-monetary in-kind donations received by the family [Notice PIH 2023-27]. Non-recurring, non-monetary in-kind donations from friends and family are excluded as non-recurring income. However, the value of regular in-kind donations (such as the value of groceries) received by friends and family are included.

• Lump-sum additions to net family assets, including but not limited to lottery or other contest

winnings [24 CFR 5.609(b)(24)(vii)].

6-I.J. WELFARE ASSISTANCE

Overview Welfare assistance is counted in annual income. Welfare assistance includes Temporary Assistance for Needy Families (TANF) and any payments to individuals or families based on need that are made under programs funded separately or jointly by federal, state, or local governments. Sanctions Resulting in the Reduction of Welfare Benefits [24 CFR 5.615] The PHA must make a special calculation of annual income when the welfare agency imposes certain sanctions on certain families. The full text of the regulation at 24 CFR 5.615 is provided as Exhibit 6-3. The requirements are summarized below. This rule applies only if a family was receiving HCV assistance at the time the sanction was imposed. Covered Families The families covered by 24 CFR 5.615 are those "who receive welfare assistance or other public assistance benefits ('welfare benefits') from a State or other public agency ('welfare agency') under a program for which Federal, State or local law requires that a member of the family must participate in an economic self-sufficiency program as a condition for such assistance" [24 CFR 5.615(b)] Imputed Income When a welfare agency imposes a sanction that reduces a family's welfare income because the family commits fraud or fails to comply with the agency's economic self-sufficiency program or work activities requirement, the PHA must include in annual income "imputed" welfare income. The PHA must request that the welfare agency provide the reason for the reduction of benefits and the amount of the reduction of benefits. The imputed welfare income is the amount that the benefits were reduced as a result of the sanction. This requirement does not apply to reductions in welfare benefits: (1) at the expiration of the lifetime or other time limit on the payment of welfare benefits, (2) if a family member is unable to find employment even though the family member has complied with the welfare agency economic self-sufficiency or work activities requirements, or (3) because a family member has not complied with other welfare agency requirements [24 CFR 5.615(b)(2)]. Offsets The amount of the imputed welfare income is offset by the amount of additional income the family begins to receive after the sanction is imposed. When the additional income equals or exceeds the imputed welfare income, the imputed income is reduced to zero [24 CFR 5.615(c)(4)].

6-I.K. STATE PAYMENTS TO ALLOW INDIVIDUALS WITH DISABILITIES TO

LIVE AT HOME [24 CFR 5.609(b)(19)] Payments made by or authorized by a state Medicaid agency (including through a managed care entity) or other state or federal agency to an assisted family to enable a member of the assisted family who has a disability to reside in the family's assisted unit are excluded. Authorized payments may include payments to a member of the assisted family through state Medicaid-managed care systems, other state agencies, federal agencies or other authorized entities. The payments must be received for caregiving services a family member provides to enable another member of the assisted family who has a disability to reside in the family's assisted unit. Payments to a family member for caregiving services for someone who is not a member of the assisted family (such as for a relative that resides elsewhere) are not excluded from income. Furthermore, if the agency is making payments for caregiving services to the family member for an assisted family member and for a person outside of the assisted family, only the payments attributable to the caregiving services for the caregiver's assisted family member would be excluded from income.

6-I.L. CIVIL RIGHTS SETTLEMENTS [24 CFR 5.609(b)(25); FR Notice 2/14/23]

Regardless of how the settlement or judgment is structured, civil rights settlements or judgments, including settlements or judgments for back pay, are excluded from annual income. This may include amounts received because of litigation or other actions, such as conciliation agreements, voluntary compliance agreements, consent orders, other forms of settlement agreements, or administrative or judicial orders under the Fair Housing Act, Title VI of the Civil Rights Act, Section 504 of the Rehabilitation Act (Section 504), the Americans with Disabilities Act, or any other civil rights or fair housing statute or requirement. While these civil rights settlement or judgment amounts are excluded from income, the settlement or judgment amounts will generally be counted toward the family's net family assets (e.g., if the funds are deposited into the family's savings account or a revocable trust under the control of the family or some other asset that is not excluded from the definition of net family assets). Income generated on the settlement or judgment amount after it has become a net family asset is not excluded from income. For example, if the family received a settlement or back pay and deposited the money in an interest-bearing savings account, the interest from that account would be income at the time the interest is received. Furthermore, if a civil rights settlement or judgment increases the family's net family assets such that they exceed the HUD-published threshold amount ($50,000 for 2024 and $51,600 for 2025), then income will be imputed on the net family assets pursuant to 24 CFR 5.609(a)(2). If the imputed income, which HUD considers unearned income, increases the family's annual adjusted income by 10 percent or more, then an interim reexamination of income will be required unless the addition to the family's net family assets occurs within the last three months of the family's income certification period and the PHA or owner chooses not to conduct the examination.

6-I.M. ADDITIONAL EXCLUSIONS FROM ANNUAL INCOME [24 CFR 5.609(b); FR

Notice 1/31/2024] Other exclusions contained in 24 CFR 5.609(b) and FR Notice 1/31/24 that have not been discussed earlier in this chapter include the following:

• Payments received for the care of foster children or foster adults or state or tribal kinship or

guardianship care payments [24 CFR 5.609(b)(4)].

• Insurance payments and settlements for personal or property losses, including but not limited

to payments through health insurance, motor vehicle insurance, and workers' compensation [24 CFR 5.609(b)(5)]. However, periodic payments paid at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that are received in lieu of wages are included in annual income [Notice PIH 2023-27].

• Amounts received by the family that are specifically for, or in reimbursement of, the cost of

health and medical care expenses for any family member [24 CFR 5.609(b)(6)].

• Any amounts recovered in any civil action or settlement based on a claim of malpractice,

negligence, or other breach of duty owed to a family member arising out of law, that resulted in a member of the family becoming disabled [24 CFR 5.609(b)(7)].

• Income and distributions from any Coverdell education savings account under Section 530 of

the Internal Revenue Code of 1986 or any qualified tuition program under Section 529 of such Code [24 CFR 5.609(b)(10)].

• Income earned by government contributions to, and distributions from, "baby bond" accounts

created, authorized, or funded by federal, state, or local government [24 CFR 5.609(b)(10)].

• The special pay to a family member serving in the Armed Forces who is exposed to hostile

fire [24 CFR 5.609(b)(11)].

• Payments related to aid and attendance under 38 U.S.C. 1521 to veterans in need of regular

aid and attendance [24 CFR 5.609(b)(17)]. This income exclusion applies only to veterans in need of regular aid and attendance and not to other beneficiaries of the payments, such as a surviving spouse [Notice PIH 2023-27].

• Loan proceeds (the net amount disbursed by a lender to or on behalf of a borrower, under the

terms of a loan agreement) received by the family or a third party (e.g., proceeds received by the family from a private loan to enable attendance at an educational institution or to finance the purchase of a car) [24 CFR 5.609(b)(20)]. The loan borrower or co-borrower must be a member of the family for this income exclusion to be applicable [Notice PIH 2023-27].

• Payments received by tribal members as a result of claims relating to the mismanagement of

assets held in trust by the United States, to the extent such payments are also excluded from gross income under the Internal Revenue Code or other federal law [24 CFR 5.609(b)(21)]. Generally, payments received by tribal members in excess of the first $2,000 of per capita shares are included in a family's annual income for purposes of determining eligibility. However, as explained in Notice PIH 2023-27, payments made under the Cobell Settlement, and certain per capita payments under the recent Tribal Trust Settlements, must be excluded from annual income.

• Replacement housing "gap" payments made in accordance with 49 CFR Part 24 that offset

increased out of pocket costs of displaced persons that move from one federally subsidized housing unit to another federally subsidized housing unit. Such replacement housing "gap" payments are not excluded from annual income if the increased cost of rent and utilities is subsequently reduced or eliminated, and the displaced person retains or continues to receive the replacement housing "gap" payments [24 CFR 5.609(b)(23)].

• Income earned on amounts placed in a family's Family Self-Sufficiency account [24 CFR

5.609(b)(27)].

• Amounts received by participants in other publicly assisted programs which are specifically

for or in reimbursement of out-of-pocket expenses incurred e.g., special equipment, clothing, transportation, childcare, etc.) and which are made solely to allow participation in a specific program [24 CFR 5.609(i)(12)(ii)].

• Amounts received by a person with a disability that are disregarded for a limited time for

purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS) [(24 CFR 5.609(b)(12)(i)].

• Amounts received under a resident service stipend not to exceed $200 per month. A resident

service stipend is a modest amount received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development [24 CFR 5.609 I(12)(ii)].

Incremental earnings and benefits to any family member resulting from participation in qualifying training program funded by HUD or in qualifying federal, state, tribal, or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff are excluded from annual income. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives and are excluded only for the period during which the family member participates in the training program unless those amounts are excluded under 24 CFR 5.609(b)(9)(i) [24 CFR 5.609(b)(12)(iv)].

• Reparation payments paid by a foreign government pursuant to claims filed under the laws of

that government by persons who were persecuted during the Nazi era [24 CFR 5.609(b)(13)].

• Adoption assistance payments for a child in excess of the amount of the dependent deduction

per adopted child [24 CFR 5.609(b)(15)].

• Refunds or rebates on property taxes paid on the dwelling unit [24 CFR 5.609(b)(20)].
• Amounts that HUD is required by federal statute to exclude from consideration as income for

purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(b) apply. HUD will publish a notice in the Federal Register to identify the benefits that qualify for this exclusion. Updates will be published when necessary.

HUD publishes an updated list of these exclusions periodically. The most recent list of exclusions was published in the Federal Register on January 31, 2014. It includes: (a) The value of the allotment provided to an eligible household under the Food Stamp Act of 1977 (7 U.S.C. 2017 (b)). This exclusion also applies to assets. (b) Benefits under Section 1780 of the Richard B. Russell School Lunch Act and Child Nutrition Act of 1966, including WIC and reduced-price lunches. (c) Payments, including for supportive services and reimbursement of out-of-pocket expenses, to volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058). The exclusion also applies to assets. - Except, the exclusion does not apply when the Chief Executive Officer of the Corporation for National and Community Service determines that the value of all such payments, adjusted to reflect the number of hours such volunteers are serving, is equivalent to or greater than the minimum wage then in effect under the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) or the minimum wage, under the laws of the State where such volunteers are serving, whichever is the greater (42 U.S.C. 5044(f)(1)). (d) Certain payments received under the Alaska Native Claims Settlement Act (43 U.S.C. 1626(c)). (e) Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes (25 U.S.C. 5506). (f) Payments or allowances made under the Department of Health and Human Services' Low-Income Home Energy Assistance Program (42 U.S.C. 8624(f)(1)). (g) Allowances, earnings, and payments to individuals participating in programs under the Workforce Investment Act of 1998 which was reauthorized as the Workforce Innovation and Opportunity Act of 2014 (29 U.S.C. 3241(a)(2)). (h) Deferred disability benefits from the Department of Veterans Affairs, whether received as a lump sum or in monthly prospective amounts. (i) Income derived from the disposition of funds to the Grand River Band of Ottawa Indians (Pub. L. 94-540, 90 Section 6). (j) Payments, funds, or distributions authorized, established, or directed by the Seneca Nation Settlement Act of 1990 (25 U.S.C. 1774f(b)). (k) A lump sum or periodic payment received by an individual Indian pursuant to the Class Action Settlement Agreement in the United States District Court case entitled Elouise Cobell et al. v. Ken Salazar et al., for a period of one year from the time of receipt of that payment as provided in the Claims Resolution Act of 2010. (l) The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the U. S. Claims Court, the interests of individual Indians in trust or restricted lands, including the first $2,000 per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands

(25 U.S.C. 1407-1408). This exclusion does not include proceeds of gaming operations regulated by the Commission (25 U.S.C. 1407–1408). (m) Payments received from programs funded under Title V of the Older Americans Act of 1965 (42 U.S.C. 3056(f)). (n) Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in In Re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y.). This exclusion also applies to assets. (o) Payments received under 38 U.S.C. 1833(c) to children of Vietnam veterans born with spinal bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean and Thailand service veterans born with spinal bifida (42 U.S.C. 12637(d)). (p) Payments received under the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721). This exclusion also applies to assets. (q) The value of any childcare provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Childcare and Development Block Grant Act of 1990 (42 U.S.C. 9858q). (r) Earned income tax credit (EITC) refund payments received on or after January 1, 1991 (26 U.S.C. 32(j)). This exclusion also applies to assets. (s) Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation (Pub. L. 95-433) This exclusion also applies to assets. (t) Amounts of student financial assistance funded under Title IV of the Higher Education Act of 1965j, including awards under federal work-study programs or under the Bureau of Indian Affairs student assistance programs (20 U.S.C. 1087uu). For Section 8 programs, only, any financial assistance in excess of amounts received by an individual for tuition and any other required fees and charges under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), from private sources, or an institution of higher education (as defined under the Higher Education Act of 1965 (20 U.S.C. 1002)), shall be considered income if the individual is over the age of 23 with dependent children (Pub. L. 109–115, section 327 (as amended)). (u) Allowances, earnings, and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d)). (v) Any amount of crime victim compensation that provides medical or other assistance (or payment or reimbursement of the cost of such assistance) under the Victims of Crime Act of 1984 received through a crime victim assistance program, unless the total amount of assistance that the applicant receives from all such programs is sufficient to fully compensate the applicant for losses suffered as a result of the crime (34 U.S.C. 20102(c)). (w) Any amounts in an "individual development account" are excluded from assets and any assistance, benefit, or amounts earned by or provided to the individual development account are excluded from income, as provided by the Assets for Independence Act, as amended (42 U.S.C. 604(h)(4)).

(x) Major disaster and emergency assistance received under the Robert T. Stafford Disaster Relief and Emergency Assistance Act and comparable disaster assistance provided by states, local governments, and disaster assistance organizations. This exclusion also applies to assets. (y) Distributions from an ABLE account, distributions from and certain contributions to an ABLE account established under the ABLE Act of 2014 (Pub. L. 113–295.), as described in Notice PIH 2019–09 or subsequent or superseding notice is excluded from income and assets. (z) The amount of any refund (or advance payment with respect to a refundable credit) issued under the Internal Revenue Code is excluded from income and assets for a period of 12 months from receipt (26 U.S.C. 6409). (aa) Assistance received by a household under the Emergency Rental Assistance Program pursuant to the Consolidated Appropriations Act, 2021 (Pub. L. 116–260, section 501(j)), and the American Rescue Plan Act of 2021. (ab) Per capita payments made from the proceeds of Indian Tribal Trust Settlements listed in IRS Notice 2013-1 and 2013-55 must be excluded from annual income unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe's private bank account in which the Tribe has deposited the settlement proceeds. Such amounts received in excess of the Tribal Trust Settlement are included in the gross income of the members of the Tribe receiving the per capita payments as described in IRS Notice 2013-1. The first $2,000 of per capita payments are also excluded from assets unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe's private bank account in which the Tribe has deposited the settlement proceeds (25 U.S.C. 117b(a), 25 U.S.C. 1407). (ac) Any amounts (i) not actually received by the family, (ii) that would be eligible for exclusion under 42 U.S.C. 1382b(a)(7), and (iii) received for service-connected disability under 38 U.S.C. Chapter 11 or dependency and indemnity compensation under 38 U.S.C. Chapter 13 (25 U.S.C. 4103(9)(C)) as provided by an amendment by the Indian Veterans Housing Opportunity Act of 2010 (Pub. L. 111–269 section 2) to the definition of income applicable to programs under the Native American Housing Assistance and Self-Determination Act (NAHASDA) (25 U.S.C. 4101 et seq.).

Part Ii: Assets

6-II.A. OVERVIEW

Annual income includes all actual anticipated income from assets (unless otherwise excluded by the regulations) even if the asset itself is excluded from net family assets [Notice PIH 2023-27]. The regulation at 24 CFR 5.603(b)(3) provides a list of items that are excluded from the calculation of net family assets. Note, unlike previous versions of the regulations, the current regulations do not list types of assets that are included in annual income. Instead, HUD relies on the definition of items excluded from assets to provide the scope of what is included. Exhibit 6-2 provides the regulatory definition of net family assets. Optional policies for family self-certification of assets are found in Chapter 7. Policies related to the asset limitation may be found in Chapters 3 and 12. Income from assets is always anticipated, irrespective of the income examination type.

6-II.B. ASSETS DISPOSED OF FOR LESS THAN FAIR MARKET VALUE

[24 CFR 5.603(b)(2)] PHAs must include the value of any business or family assets disposed of by an applicant or participant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application or reexamination, as applicable, in excess of the consideration received for the asset. An asset moved to a retirement account held by a member of the family is not considered to be an asset disposed of for less than fair market value. [Notice PIH 2023-27]. The family must certify whether any assets have been disposed of for less than fair market value in the preceding two years. Minimum Threshold The HCV Guidebook permits the PHA to set a threshold below which assets disposed of for less than fair market value will not be counted [HCV GB, p. 5-27].

Family Declaration

6-II.C. ASSET INCLUSIONS AND EXCLUSIONS

Necessary and Non-Necessary Personal Property [24 CFR 5.603(b)(3)(i)] All assets are categorized as either real property (e.g., land, a home) or personal property. Personal property includes tangible items, like boats, as well as intangible items, like bank accounts. The value of necessary items of personal property is excluded from the calculation of net family assets. Necessary items of personal property include a car used for commuting or medical devices. HUD defines necessary personal property as items essential to the family for the maintenance, use, and occupancy of the premises as a home; or they are necessary for employment, education, or health and wellness. Necessary personal property includes more than merely items that are indispensable to the bare existence of the family. It may include personal effects (such as items that are ordinarily worn or utilized by the individual), items that are convenient or useful to a reasonable existence, and items that support and facilitate daily life within the family's home. Necessary personal property also includes items that assist a household member with a disability, including any items related to disability-related needs, or that may be required for a reasonable accommodation for a person with a disability. Necessary personal property does not include bank accounts, other financial investments, or luxury items. Items of personal property that do not qualify as necessary personal property are classified as non-necessary personal property. The combined value of all non-necessary items of personal property is only included in annual income when the combined total value exceeds the HUD-published threshold amount (adjusted annually and published in the HUD's current year Inflation-Adjusted Values tables). When the combined value of all non-necessary personal property does not exceed the HUD-published threshold amount, all non-necessary personal property is excluded from net family assets.

• The threshold amount is $50,000 for 2025 and $51,600 for 2025

While not an exhaustive list, the following table from Notice PIH 2023-27 provides examples of necessary and non-necessary personal property.

Necessary Personal Property Non-Necessary Personal Property Car(s)/vehicle(s) that a family relies on for Recreational car/vehicle not needed for day-to- transportation for personal or business use day transportation for personal or business use (e.g., bike, motorcycle, skateboard, scooter) (campers, motorhomes, traveling trailers, all- terrain vehicles (ATVs)) Furniture, carpets, linens, kitchenware Bank accounts or other financial investments Common appliances (e.g., checking account, savings account, Common electronics (e.g., radio, television, stocks/bonds) DVD player, gaming system) Recreational boat/watercraft Clothing Expensive jewelry without religious or cultural Personal effects that are not luxury items value, or which does not hold family (e.g., toys, books) significance Wedding and engagement rings Collectibles (e.g., coins/stamps) Jewelry used in religious/cultural celebrations Equipment/machinery that is not used to and ceremonies generate income for a business Religious and cultural items Items such as gems/precious metals, antique Medical equipment and supplies cars, artwork, etc.

Health care–related supplies Musical instruments used by the family Personal computers, phones, tablets, and related equipment Professional tools of trade of the family, for example professional books Educational materials and equipment used by the family, including equipment to accommodate persons with disabilities Equipment used for exercising (e.g., treadmill, stationary bike, kayak, paddleboard, ski equipment)

Checking and Savings Accounts [Notice PIH 2023-27] HUD considers bank accounts as non-necessary items of personal property. Whether or not non-necessary personal property is counted toward net family assets depends on the combined value of all of the family's assets.

• When the combined value of net family assets is greater than the HUD-published threshold

amount, which is adjusted annually and listed in HUD's Inflation-Adjustment Values tables ($50,000 for 2024 and $51,600 for 2025), checking and/or savings accounts would be counted toward net family assets.

• When the combined value of all non-necessary personal property does not exceed the HUD-

published threshold amount, all non-necessary personal property is excluded from net family assets. In this case, the value of the family's checking and/or savings accounts would not be considered when calculating net family assets. However, actual income from checking and savings accounts is always included in a family's annual income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets, unless that income is specifically excluded. ABLE Accounts [24 CFR 5.609(b)(10); Notice PIH 2019-09] An Achieving a Better Life Experience (ABLE) account is a type of tax-advantaged savings account that an eligible individual can use to pay for qualified disability expenses. Section 103 of the ABLE Act mandates that an individual's ABLE account (specifically, its account balance, contributions to the account, and distributions from the account) is excluded when determining the designated beneficiary's eligibility and continued occupancy under certain federal means- tested programs. The PHA must exclude the entire value of the individual's ABLE account from the household's assets. Distributions from the ABLE account are also not considered income. However, all wage income received, regardless of which account the money is paid to, is included as income.

Investment Accounts Such as Stocks, Bonds, Saving Certificates, and Money Market Funds [24 CFR 5.603(b)(1)] HUD considers financial investments such as stocks and bonds non-necessary items of personal property. Whether non-necessary personal property is counted toward net family assets depends on the combined value of all of the family's assets.

• When the combined value of net family assets is greater than the HUD-published threshold

amount, which is adjusted annually and listed in HUD's Inflation Adjusted Values tables ($50,000 for 2024 and $51,600 for 2025), financial investments such as stocks and bonds are considered part of net family assets. In this case, the value of the family's financial investments such as stocks and bonds would be counted toward net family assets.

• When the combined value of all non-necessary personal property does not exceed the HUD-

published threshold amount, , all non-necessary personal property is excluded from net family assets. In this case, the value of the family's financial investments such as stocks and bonds would not be considered when calculating net family assets. However, actual income from financial accounts is always included in a family's annual income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets, unless that income is specifically excluded. When a stock issues dividends in some years but not others (e.g., due to market performance), the dividend is counted as the actual return when it is issued, but when no dividend is issued, the actual return is $0. When the stock never issues dividends, the actual return is $0.

Lump-Sum Additions to Net Family Assets [24 CFR 5.609(b)(24(viii); Notice PIH 2023-27] The regulations exclude income from lump-sum additions to family assets, including lottery or other contest winnings as a type of nonrecurring income. In addition, lump sums from insurance payments, settlements for personal or property losses, and recoveries from civil actions or settlements based on claims of malpractice, negligence, or other breach of duty owed to a family member arising out of law that resulted in a member of the family becoming a family member with a disability are excluded from income. Further, deferred periodic amounts from Supplemental Security Income (SSI) and Social Security benefits that are received in a lump sum amount or in prospective monthly amounts, or any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or in prospective monthly amounts are also excluded from income. However, these amounts may count toward net family assets. The PHA must consider any actual or imputed returns from assets as income at the next applicable income examination. In the case where the lump sum addition to assets would lead to imputed income, which is unearned income, that increases the family's annual adjusted income by 10 percent or more, then the addition of the lump sum to the family's assets will trigger an immediate interim reexamination of income in accordance with Chapter 11. This reexamination of income must take place as soon as the lump sum is added to the family's net family assets unless the addition takes place in the last three months of family's income certification period and the PHA chooses not to conduct the examination. For a discussion of lump-sum payments that represent the delayed start of a periodic payment, most of which are counted as income, see sections 6-I.H and 6-I.I.

Jointly Owned Assets [Notice PIH 2023-27] For assets owned jointly by the family and one or more individuals outside of the assisted family, the PHA must include the total value of the asset in the calculation of net family assets, unless:

• The asset is otherwise excluded;
• The family can demonstrate that the asset is inaccessible to them; or
• The family cannot dispose of any portion of the asset without the consent of another owner

who refuses to comply. If the family demonstrates that they can only access a portion of an asset, then only that portion's value is included in the calculation of net family assets for the family. Any income from a jointly owned asset must be included in annual income, unless:

• The income is specifically excluded;
• The family demonstrates that they do not have access to the income from that asset; or
• The family only has access to a portion of the income from that asset.

If the family demonstrates that they can only access a portion of the income from an asset, then only that portion's value is included in the calculation of income from assets. If an individual is a beneficiary who is entitled to access the account's funds only upon the death of the account's owner, and may not otherwise withdraw funds from an account, then the account is not an asset to the assisted family, and the family should provide proper documentation demonstrating that they are only a beneficiary on the account. Trusts [24 CFR 5.609(b)(2) and 5.603(b)(4)] A trust is a legal arrangement generally regulated by state law in which one party (the creator or grantor) transfers property to a second party (the trustee) who holds the property for the benefit of one or more third parties (the beneficiaries). The basis for determining how to treat trusts relies on information about who has access to either the principal in the account or the income from the account. There are two types of trusts, revocable and irrevocable.

When the creator sets up an irrevocable trust, the creator has no access to the funds in the account. Typically, special needs trusts are considered irrevocable. Irrevocable trusts not under the control of any member of the family are excluded from net family assets. The value of the trust continues to be excluded from net family assets, so long as the fund continues to be held in a trust that is not revocable by, or under the control of, any member of the family or household [24 CFR 5.603(b)(4)]. Further, where an irrevocable trust is excluded from net family assets, the PHA must not consider actual income earned by the trust (e.g., interest earned, rental income if property is held in the trust) for so long as the income from the trust is not distributed. A revocable trust is a trust that the creator of the trust may amend or end (revoke). When there is a revocable trust, the creator has access to the funds in the trust account.

• A revocable trust that is under the control of the family is included in net family assets when

the grantor is a member of the assisted family. If a revocable trust is included in the calculation of net family assets, then the actual income earned by the revocable trust is also included in the family's income. For example, interest earned or rental income if the property is held in the trust. The PHA must calculate imputed income on the revocable trust if net family assets are more than the HUD-published threshold amount, which is adjusted annually and listed in HUD's Inflation Adjusted Values tables ($50,000 for 2024 and $51,600 for 2025), and actual income from the trust cannot be calculated (e.g., if the trust is comprised of farmland that is not in use).

• The value of a revocable trust that is not under the control of the family is excluded from net

family assets. This happens when a member of the assisted family is the beneficiary of a revocable trust, but the grantor is not a member of the assisted family. In this case the beneficiary does not "own" the revocable trust, and the value of the trust is excluded from net family assets. For the revocable trust to be considered excluded from net family assets, no family or household member may be the account's trustee. For both irrevocable and revocable trusts, if the value of the trust is not considered part of net family assets, then distributions from the trust are treated as follows:

• All distributions from the trust's principal are excluded from income.
• Distributions of income earned by the trust (i.e., interest, dividends, realized gains, or other

earnings on the trust's principal), are included as income unless the distribution is used to pay for the health and medical expenses for a minor.

Life Insurance [FR Notice 2/14/23 and Notice PIH 2023-27] Net family assets do not include the value of term life insurance, which has no cash value to the individual before death. The cash value of a life insurance policy available to a family member before death, such as a whole life or universal life policy, is included in the calculation of the value of the family's assets. The cash value is the surrender value. While the cash value of an insurance policy is considered an asset, the face value of any policy is not. If such a policy earns dividends or interest that the family could elect to receive, the amount of dividends or interest is counted as income from the asset whether or not the family actually receives it. Tax Refunds [24 CFR 5.603(b)(3)(xi) and Notice PIH 2023-27] All amounts received by a family in the form of federal tax refunds or refundable tax credits are excluded from a family's net family assets for a period of 12 months after receipt by the family. At the time of an annual or interim reexamination of income, if the federal tax refund was received during the 12 months preceding the effective date of the reexamination, then the amount of the refund that was received by the family is subtracted from the total value of net family assets. When the subtraction results in a negative number, then net family assets are considered $0. Asset Exclusions [24 CFR 5.603(b)] The following are excluded from the calculations of net family assets:

• The value of any account under a retirement plan recognized as such by the IRS, including

individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals [24 CFR 5.603(b)(3)(iii)].

• The value of real property that the family does not have the effective legal authority to sell in

the jurisdiction in which the property is located [24 CFR 5.603(b)(3)(iv)]. - Real property as used in this part has the same meaning as that provided under the law of the state in which the property is located [24 CFR 5.100]. - Examples of this include but are not limited to co-ownership situations (including situations where one owner is a victim of domestic violence), where one party cannot unilaterally sell the real property; property that is tied up in litigation; and inherited property in dispute [Notice PIH 2023-27].

• Any amounts recovered in any civil action or settlement based on a claim of malpractice,

negligence, or other breach of duty owed to a family member arising out of law, that resulted in a family member being a person with a disability [24 CFR 5.603(b)(3)(v)];

• The value of any Coverdell education savings account under section 530 of the Internal

Revenue Code of 1986 [24 CFR 5.603(b)(3)(vi)];

• The value of any qualified tuition program under Section 529 of such Code [24 CFR

5.603(b)(3)(vi)];

• The value of any "baby bond" account created, authorized, or funded by federal, state, or

local government [24 CFR 5.603(b)(3)(vi)];

• Interests in Indian trust land [24 CFR 5.603(b)(3)(vii)];
• Equity in a manufactured home where the family receives assistance under 24 CFR part 982

[24 CFR 5.603(b)(3)(viii)];

• Equity in property under the Homeownership Option for which a family receives assistance

under 24 CFR part 982 [24 CFR 5.603(b)(3)(ix)];

• Family Self-Sufficiency accounts [24 CFR 5.603(b)(3)(x)];
• Federal tax refunds or refundable tax credits for a period of 12 months after receipt by the

family [24 CFR 5.603(b)(3)(xi)].

• The full amount of assets held in an irrevocable trust [Notice PIH 2023-27]; and
• The full amount of assets held in a revocable trust where a member of the family is the

beneficiary, but the grantor/owner and trustee of the trust is not a member of the participant family or household [Notice PIH 2023-27].

6-II.D. DETERMINING INCOME FROM ASSETS

In some cases, amounts that are excluded from net family assets may be included as annual income when disbursements are made to a family from an asset. In other cases, amounts are excluded from annual income as a lump-sum addition to net family assets, but those funds are then considered a net family asset if held in an account or other investment that is considered part of net family assets [Notice PIH 2023-27]. Net Family Assets Net family assets are defined as the net cash value of all assets owned by the family, after deducting reasonable costs that would be incurred in disposing real property, savings, stocks, bonds, and other forms of capital investment.

• The market value of an asset is its worth in the market (e.g., the amount a buyer would pay

for real estate or the total value of an investment account).

• The cash value of an asset is its market value less all reasonable amounts that would be

incurred when converting the asset to cash. The cash value of real property or other assets with negative equity would be considered $0 for the purposes of calculating net family assets. Negative equity in real property or other investments does not prohibit the family from selling the property or other investments, so negative equity alone would not justify excluding the property or other investments from family assets [Notice PIH 2023-27].

Actual Income from Assets Income from assets must be included on the Form HUD-50058 regardless of the amount of income. Actual income from assets is always included in a family's annual income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets, unless that income is specifically excluded by 24 CFR 5.609(b). Income or returns from assets are generally considered to be interest, dividend payments, and other actual income earned on the asset, and not the increase in market value of the asset. The increase in market value is relevant to the cash value of the asset for the purpose of determining total net family assets and imputing income. The PHA may determine the net assets of a family based on a self-certification by the family that the net family assets do not exceed the HUD-published threshold amount which is adjusted annually and listed in HUD's Inflation Adjusted Values tables, without taking additional steps to verify the accuracy of the declaration [24 CFR 5.618(b)]. Policies related to verification of assets are found in Chapter 7 of this policy.

• The threshold amount is $50,000 for 2024 and $51,600 for 2025.

The PHA may not calculate or include any imputed income from assets when net family assets total are less than or equal to the HUD-published threshold amount [24 CFR 5.609(b)(1)]. The actual income from assets must be included on the Form HUD-50058. Imputed Income from Assets When net family assets exceed the HUD-published threshold amount (which is adjusted annually and listed in the HUD's Inflation Adjusted Values table), the PHA may not rely on self- certification. If actual returns can be calculated, the PHA must include actual income from the asset on the Form HUD-50058 (for example, a savings account or CD where the rate of return is known). If actual returns cannot be calculated, the PHA must calculate imputed returns using the HUD-determined passbook rate (for example, real property or a non-necessary item of personal property such as a recreational boat). Imputed income is calculated by multiplying the net cash value of the asset, (found by deducting reasonable costs that would be incurred in disposing of the asset from the market value), by the HUD-published passbook rate. If the PHA can compute actual income from some but not all assets, the PHA must compute actual returns where possible and use the HUD-determined passbook rate for assets where actual income cannot be calculated [24 CFR 5.609(a)(2)]. An asset with an actual return of $0 (such as a non-interest-bearing checking account), is not the same as an asset for which an actual return cannot be computed (such as non-necessary personal property). If the asset is a financial asset and there is no income generated (for example, a bank account with a zero percent interest rate or a stock that does not issue cash dividends), then the asset generates zero actual asset income, and imputed income is not calculated. When a stock issues dividends in some years but not others (e.g., due to market performance), the dividend is counted as the actual return when it is issued, and when no dividend is issued, the actual return is $0. When the stock never issues dividends, the actual return is consistently $0.

Part Iii: Adjusted Income

6-III.A. INTRODUCTION

Overview HUD regulations require PHAs to deduct from annual income any of five mandatory deductions for which a family qualifies and allow the PHA to deduct other permissive deductions in accordance with PHA policy. The resulting amount is the family's adjusted income. Mandatory deductions are found in 24 CFR 5.611. 5.611 Adjusted income means annual income (as determined under § 5.609) of the members of the family residing or intending to reside in the dwelling unit, after making the following deductions: (a) Mandatory deductions (1) $480 for each dependent (adjusted annually by HUD, rounded to the next lowest multiple of $25); (2) $525 for any elderly family or disabled family (adjusted annually by HUD, rounded to the next lowest multiple of $25); (3) The sum of the following, to the extent the sum exceeds ten percent of annual income: (i) Unreimbursed health and medical care expenses of any elderly family or disabled family; (ii) Unreimbursed reasonable attendant care and auxiliary apparatus expenses for each member of the family who is a person with disabilities, to the extent necessary to enable any member of the family (including the member who is a person with disabilities) to be employed; and (4) Any reasonable childcare expenses necessary to enable a member of the family to be employed or to further his or her education. This part covers policies related to these mandatory deductions. Verification requirements related to these deductions are found in Chapter 7. Anticipating Expenses

When calculating health and medical care expenses, the Authority will include those expenses anticipated to be incurred during the 12 months following the certification date which are not covered by an outside source, such as insurance. The allowance is not intended to give a family an allowance equal to last year's expenses, but to anticipate regular ongoing and anticipated expenses during the coming year. Since these expenses are anticipated, the PH Occupancy Guidebook states "it is likely that actual expenses will not match what was anticipated. Typically, this would not be considered an underpayment as long as at the time of the annual reexamination, the expenses were calculated based on the appropriate verification" [New PH OCC GB, Income Determinations, p. 30]. For annual reexaminations, the PHA will use information for the previous 12-month period.

6-III.B. DEPENDENT DEDUCTION

An allowance of $480 is deducted from annual income for each dependent (which amount will be adjusted by HUD annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the next lowest multiple of $25) [24 CFR 5.611(a)(1)]. Dependent is defined as any family member other than the head, spouse, or cohead who is under the age of 18 or who is 18 or older and is a person with disabilities or a full-time student. Foster children, foster adults, and live-in aides are never considered dependents [24 CFR 5.603(b)].

6-III.C. ELDERLY OR DISABLED FAMILY DEDUCTION

A single deduction of $525 is taken for any elderly or disabled family (which amount will be adjusted by HUD annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the next lowest multiple of $25) [24 CFR 5.611(a)(2)]. An elderly family is a family whose head, spouse, cohead, or sole member is 62 years of age or older, and a disabled family is a family whose head, spouse, cohead, or sole member is a person with disabilities [24 CFR 5.403].

6-III.D. HEALTH AND MEDICAL CARE EXPENSES DEDUCTION [24 CFR

5.611(a)(3)(i) and 5.603(b)] Unreimbursed health and medical care expenses may be deducted to the extent that, in combination with any disability assistance expenses, they exceed ten percent of annual income. This deduction is permitted only for families in which the head, spouse, or cohead is at least 62 or is a person with disabilities. If a family is eligible for a health and medical care expense deduction, the unreimbursed health and medical care expenses of all family members are included. The PHA calculates health and medical care expenses based on the family's past expenses, but accounting for any anticipated changes in expenses during the certification period. Definition of Medical Expenses HUD regulations define health and medical care expenses at 24 CFR 5.603(b) to mean "any costs incurred in the diagnosis, cure, mitigation, treatment, or prevention of disease or payments for treatments affecting any structure or function of the body. Health and medical care expenses include medical insurance premiums and long-term care premiums that are paid or anticipated during the period for which annual income is computed." Health and medical care expenses may be deducted from annual income only if they are eligible under this definition and not otherwise reimbursed. Although HUD revised the definition of health and medical care expenses to reflect the Internal Revenue Service (IRS) general definition of medical expenses, HUD is not permitting PHAs to specifically align their policies to IRS Publication 502. PHAs must review each expense to determine whether it is eligible in accordance with HUD's definition. While PHA policies may not specifically align with IRS Publication 502, HUD recommends PHAs use it as a standard for determining allowable expenses, and the PHA may list examples of allowable expenses in their policy provided they comply with HUD's definition at 24 CFR 5.603. The PHA may not define health and medical care expenses more narrowly than the regulation.

Summary of Typical Allowable Health and Medical Care Expenses Services of medical professionals Substance abuse treatment programs Surgery and medical procedures that are Psychiatric treatment necessary, legal, and non-cosmetic Ambulance services and some costs of Services of medical facilities transportation related to medical expenses. The PHA will use the most Hospitalization, long-term care, and in- current medical mileage rate listed in home nursing services IRS Publication 502. Prescription medicines and insulin, but The cost and care of necessary not nonprescription medicines even if recommended by a doctor equipment related to a medical condition (e.g., eyeglasses/lenses, Improvements to housing directly related hearing aids, crutches, and artificial to medical needs (e.g., ramps for a teeth) wheelchair, handrails) The costs of buying, training, and Medical insurance premiums or the cost maintaining a guide dog or other service of a health maintenance organization animal to assist a visually impaired or (HMO) hearing disabled person, or a person Medicare Part B and Part D premiums with other physical disabilities. In general, this includes any costs, such as food, grooming, and veterinary care, incurred in maintaining the health and vitality of the service animal so that it may perform its duties. Note: This chart provides a summary of eligible health and medical care expenses only. In all cases, the PHA will consider whether health and medical expenses care expenses claimed by the family are eligible under HUD's definition.

Families That Qualify for Both Health and Medical and Disability Assistance Expenses

6-III.E. DISABILITY ASSISTANCE EXPENSES DEDUCTION [24 CFR 5.603(b) and

24 CFR 5.611(a)(3)(ii)] Unreimbursed reasonable expenses for attendant care and auxiliary apparatus for each member of the family who is a person with disabilities may be deducted if they: (1) Are necessary to enable a family member 18 years or older to work, (2) Are not paid to a family member or reimbursed by an outside source, (3) In combination with any medical expenses, exceed ten percent of annual income, and (4) Do not exceed the earned income received by the family member who is enabled to work. Earned Income Limit on the Disability Assistance Expense Deduction A family can qualify for the disability assistance expense deduction only if at least one family member (who may be the person with disabilities) is enabled to work [24 CFR 5.603(b)]. The disability expense deduction is capped by the amount of "earned income received by family members who are 18 years of age or older and who are able to work" because of the expense [24 CFR 5.611(a)(3)(ii)]. The earned income used for this purpose is the amount verified before any earned income disallowances or income exclusions are applied.

Eligible Attendant Care [Notice PIH 2023-27] Examples of attendant care expenses can include teaching a person with disabilities how to perform day-to-day tasks independently like cleaning, bathing, doing laundry, and cooking. Attendant care can be 24-hour care, or care during sporadic periods throughout the day. The family determines the type of attendant care that is appropriate for the person with disabilities.

6-III.F. CHILDCARE EXPENSE DEDUCTION

HUD defines childcare expenses at 24 CFR 5.603(b) as "amounts anticipated to be paid by the family for the care of children under 13 years of age (age 12 and younger) (including foster children) during the period for which annual income is computed, but only where such care is necessary to enable a family member to actively seek employment, be gainfully employed, or to further his or her education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for childcare. In the case of childcare necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income." Clarifying the Meaning of Child for This Deduction Childcare expenses do not include child support payments made to another on behalf of a minor who is not living in an assisted family's household [VG, p. 26]. However, childcare expenses for foster children that are living in the assisted family's household are included when determining the family's childcare expenses [HCV GB, p. 5-29]. Qualifying for the Deduction Determining Who Is Enabled to Pursue an Eligible Activity

Furthering Education

Eligible Childcare Expenses The type of care to be provided is determined by the assisted family. The PHA may not refuse to give a family the childcare expense deduction because there is an adult family member in the household that may be available to provide childcare [VG, p. 26]. Allowable Childcare Activities

6-III.G. HARDSHIP EXEMPTIONS [24 CFR 5.611(c), (d), and (e)]

Health and Medical Care and Disability Assistance Expenses [24 CFR 5.611(c); Notice PIH 2023-27] The regulations provide for two types of hardship exemption categories for families that qualify for unreimbursed health and medical care expenses and/or disability assistance expenses. A family will benefit from this hardship exemption only if the family has eligible expenses that can be deducted in excess of five percent of annual income. In order to claim unreimbursed health and medical care expenses, the family must have a head, cohead, or spouse that is elderly or a person with a disability. In order to claim unreimbursed reasonable attendant care and auxiliary apparatus expenses, the family must include a person with a disability, and the expenses must enable any member of the family (including the member who is a person with a disability) to be employed. Families may be eligible for relief under one of two categories; phased-in relief or general relief, as defined below. Phased-In Relief The first category is applicable to all families who received a deduction for unreimbursed health and medical care and/or reasonable attendant care or auxiliary apparatus expenses based on their most recent income review prior to January 1, 2024. The family must receive phased-in relief if they are determined to be eligible. These families will begin receiving a 24-month phased-in relief at their next annual or interim reexamination, whichever occurs first, after the date on which the PHA implements phased-in relief. For these families, the threshold amount is phased-in as follows:

• The family is eligible for a deduction totaling the sum of expenses that exceeds 5 percent of

annual income for the first 12 months.

• At the conclusion of 12 months, the family is eligible for a deduction totaling the sum of their

expenses that exceed 7.5 percent of annual income for another 12 months. At the conclusion of 24 months, the standard threshold amount of 10 percent would be used, unless the family qualifies for relief under the general hardship relief category. When an eligible family's phased-in relief begins at an interim reexamination, the PHA must process another transaction (either an interim reexamination or non-interim transaction, as applicable) one year later to move the family to the next phase. Prior to the end of the 24-month period, the family may request a hardship exemption under the second category as described below. If the family is found eligible under the second category, the hardship exemption under the first category ends, and the family's hardship is administered in accordance with the requirements listed below. Once a family requests general relief, the family may no longer receive phased-in relief.

PHAs must track the 24-month phase-period for each eligible family, even if a family's expenses go below the appropriate phase-in percentage, during the first or second 12-month phase-in period. The phase-in must continue for families who move to another public housing unit at the same PHA. When the family is treated as a new admission under a different property/program (e.g., the family moves from public housing to the HCV program), unless the PHA has a written policy to continue the phased-in relief upon admission, the family's expense deduction will be calculated using the 10-percent threshold unless request for general relief is approved by the PHA. When a family moves with continued assistance or ports to a new PHA, the family must continue to receive the phased-in relief. The family must receive the remaining calendar months of the percentage phase-in. The PHA must use the existing phase-in documentation to determine the remaining calendar months and the percentage phase-in.

• Their health and medical and/or disability assistance expenses increased (other than the

transition to the higher threshold); or

• The family's financial hardship is a result of a change in circumstances (as defined in PHA

policy) that would not otherwise trigger an interim reexamination. The family may request a hardship exemption under the second category regardless of whether the family previously received the health and medical and/or disability assistance deductions or are currently or were previously receiving relief under the phased-in relief category above. HUD requires that PHAs develop policies defining what constitutes a hardship for purposes of this exemption. The PHA must obtain third-party verification of the hardship or must document in the file the reason third-party verification was not available. PHAs must attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period.

The family is awaiting an eligibility determination for a federal, state, or local assistance program, such as a determination for unemployment compensation or disability benefits; The family's income decreased because of a loss of employment, death of a family member, or due to a natural or federal/state declared disaster; or Other circumstances as determined by the Authority. The family must provide third-party verification of the hardship with the request. If third- party verification is not available, the Authority will document the file with the reason and will attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period. The PHA must promptly notify the family in writing of the change in the determination of adjusted income and the family's rent resulting from hardship exemptions. The notice must inform the family of when the hardship exemption will begin and expire [24 CFR 5.611(e)(2)].

Families must report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. At any time, the Authority may terminate the hardship exemption if the Authority determines that the family no longer qualifies for the exemption. Childcare Expense Hardship Exemption [24 CFR 5.611(d) and Notice PIH 2023-27] A family whose eligibility for the childcare expense deduction is ending may request a financial hardship exemption to continue receiving the deduction. If the family demonstrates to the PHA's satisfaction that the family is unable to pay their rent because of the loss of the childcare expense deduction, and that the childcare expense is still necessary even though the family member is not working, looking for work, or seeking to further their education, the PHA must recalculate the family's adjusted income and continue the childcare deduction. The PHA must develop a policy to define what constitutes a hardship, which includes the family's inability to pay rent. The PHA must obtain third-party verification of the hardship or must document in the file the reason third-party verification was not available. PHAs must attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period.

for relief are no longer applicable and that the family's adjusted income and tenant rent will be recalculated upon expiration of the hardship exemption [Notice PIH 2023-27].

6-III.H. PERMISSIVE DEDUCTIONS [24 CFR 5.611(b)(1)(ii)]

The PHA may adopt additional permissive deductions from annual income if they establish a policy in the administrative plan. Permissive deductions are additional, optional deductions that may be applied to annual income. As with mandatory deductions, permissive deductions must be

based on need or family circumstance and deductions must be designed to encourage self- sufficiency or other economic purpose. If the PHA offers permissive deductions, they must be granted to all families that qualify for them and should complement existing income exclusions and deductions [PH Occ GB, p. 128]. Permissive deductions may be used to incentivize or encourage self-sufficiency and economic mobility. A PHA that adopts such deductions must have sufficient funding to cover the increased housing assistance payment cost of the deductions. A PHA will not be eligible for an increase in HCV renewal funding for subsidy costs resulting from such deductions.

Part Iv: Calculating Family Share And Pha Subsidy

6-IV.A. OVERVIEW OF RENT AND SUBSIDY CALCULATIONS

TTP Formula [24 CFR 5.628] HUD regulations specify the formula for calculating the total tenant payment (TTP) for an assisted family. TTP is the highest of the following amounts, rounded to the nearest dollar:

• 30 percent of the family's monthly adjusted income (adjusted income is defined in Part II)
• 10 percent of the family's monthly gross income (annual income, as defined in Part I, divided

by 12)

• The welfare rent (in as-paid states only)
• A minimum rent between $0 and $50 that is established by the PHA

The PHA has authority to suspend and exempt families from minimum rent when a financial hardship exists, as defined in section 6-IV.B. The amount that a family pays for rent and utilities (the family share) will never be less than the family's TTP but may be greater than the TTP depending on the rent charged for the unit the family selects. Welfare Rent [24 CFR 5.628]

PHA Subsidy [24 CFR 982.505(b)] The PHA will pay a monthly housing assistance payment (HAP) for a family that is equal to the lower of (1) the applicable payment standard for the family minus the family's TTP or (2) the gross rent for the family's unit minus the TTP. (For a discussion of the application of payment standards, see section 6-IV.C.) Utility Reimbursement [24 CFR 982.514(b); 982.514(c)] When the PHA subsidy for a family exceeds the rent to owner, the family is due a utility reimbursement. HUD permits the PHA to pay the reimbursement to the family or directly to the utility provider.

6-IV.B. FINANCIAL HARDSHIPS AFFECTING MINIMUM RENT [24 CFR 5.630]

(4) A death has occurred in the family.

Example: Impact of Minimum Rent Exemption Assume the PHA has established a minimum rent of $50. Family Share – No Hardship Family Share – With Hardship $0 30% of monthly adjusted income $0 30% of monthly adjusted income $15 10% of monthly gross income $15 10% of monthly gross income N/A Welfare rent N/A Welfare rent $50 Minimum rent $50 Minimum rent Minimum rent applies. Hardship exemption granted. TTP = $50 TTP = $15

6-IV.C. APPLYING PAYMENT STANDARDS [24 CFR 982.505(c) and Notice PIH 2024-

34)] Overview The PHA's schedule of payment standards is used to calculate housing assistance payments for HCV families. This section covers the application of the PHA's payment standards. The establishment and revision of the PHA's payment standard schedule are covered in Chapter 16. Payment standard is defined as "the maximum monthly assistance payment for a family assisted in the voucher program (before deducting the total tenant payment by the family)" [24 CFR 982.4(b)]. The payment standard for a family is the lower of (1) the payment standard for the family unit size, which is defined as the appropriate number of bedrooms for the family under the PHA's subsidy standards [24 CFR 982.4(b)], or (2) the payment standard for the size of the dwelling unit rented by the family [24 CFR 982.505(c)(1)]. If the PHA has established an exception payment standard for a designated part of a an FMR area in accordance with 24 CFR 982.503, and a family's unit is located in the designated area, the PHA must use the appropriate payment standard for the exception area [CFR 982.505(c)(2)]. The PHA is required to pay a monthly housing assistance payment (HAP) for a family that is the lower of (1) the payment standard for the family minus the family's TTP or (2) the gross rent for the family's unit minus the TTP. If during the term of the HAP contract for a family's unit, the owner lowers the rent, the PHA will recalculate the HAP using the lower of the initial payment standard or the gross rent for the unit [HCV GB, p. 7-8]. Changes in Payment Standards When the PHA revises its payment standards during the term of the HAP contract for a family's unit, it will apply the new payment standards in accordance with HUD regulations. Regulations governing increase and decreases in the payment standard have changed, with a required compliance date of December 3, 2024. Decreases [24 CFR 982.505(c)(3) and Notice PIH 2024-34] For new HAP contracts, the PHA applies the payment standard in effect at the time of HAP contract execution. The PHA must administer decreases in the payment standard amount for the family in accordance with the PHA policy as described in the administrative plan and apply the policy consistently to all families. If a PHA changes its payment standard schedule, resulting in a lower payment standard amount, during the term of a HAP contract, the PHA is not required to reduce the payment standard used to calculate subsidy for families under HAP contract as long as the HAP contract remains in effect. The PHA must administer decreases in the payment standard amount for the family in accordance with the PHA policy as described in the administrative plan. Changes effective 12/2/24 and earlier: If the PHA does choose to reduce the payment standard for families currently under HAP contract, the initial reduction to the payment standard may not

be applied any earlier than the effective date of the family's second regular reexamination following the effective date of the decrease in the payment standard amount. Changes effective 12//3/24 and later: If the PHA does choose to reduce the payment standard for families currently under HAP contract, the initial reduction to the payment standard may not be applied any earlier than two years following the effective date of the decrease in the payment standard and only with proper written notice to the family in accordance with 24 CFR 982.505(c)(3)(iii). At that point, the PHA may either reduce the payment standard to the current amount in effect on the PHA's payment standard schedule, or may reduce the payment standard to another amount that is higher than the normally applicable amount on the schedule. The PHA may also establish different policies for designated areas within their jurisdiction (e.g., different zip code areas).

In any case, the PHA must provide the family with at least 12 months' notice that the payment standard is being reduced before the effective date of the change. In the written notice, the PHA must state the new payment standard amount, explain that the family's new payment standard amount will be the greater of the amount listed in the current written notice or the new amount (if any) on the PHA's payment standard schedule at the end of the 12-month period, and make clear where the family will find the PHA's payment standard schedule. The PHA's policy on decreases in the payment standard during the term of the HAP contract apply to all families under HAP contract at the time of the effective date of the decrease in the payment standard within the designated area.

• If the family moves to a new unit, or a new HAP contract is executed due to

changes in the lease (even if the family remains in place) the current payment standard applicable to the family will be used when the new HAP contract is processed. Increases [24 CFR 982.505(c)(4) and Notice PIH 2024-34] For new HAP contracts, the PHA applies the payment standard in effect at the time of the HAP contract execution. Changes effective 12/2/24 and earlier: If the payment standard is increased during the term of the HAP contract, the increased payment standard will be used to calculate the monthly housing assistance payment for the family beginning on the effective date of the family's first regular reexamination on or after the effective date of the increase in the payment standard. Families requiring or requesting interim reexaminations will not have their HAP payments calculated using the higher payment standard until their next annual reexamination [HCV GB, p. 7-8]. Changes effective 12/3/24 and later: If the payment standard is increased during the term of the HAP contract, the increased payment standard will be applied no later than the earliest of:

• The effective date of an increase in the gross rent that would result in an increase

in the family share;

• The family's first regular or interim reexamination; or
• One year following the effective date of the increase in the payment standard

amount. The PHA may adopt a policy to apply a payment standard increase at any time earlier than the date calculated above as long as the policy is included in the administrative plan and applied consistently to all families [24 CFR 982.505(c)(5)].

Authority Policy

If the payment standard amount has increased, the increased payment standard will be applied at the first annual reexamination following the effective date of the increase in the payment standard. Changes in Family Unit Size (Voucher Size)[24 CFR 982.505(c)(6) and Notice PIH 2024-34] Changes effective 12/2/24 and earlier: Irrespective of any increase or decrease in the payment standard, if the family unit size increases or decreases during the HAP contract term, the new family unit size must be used to determine the payment standard for the family beginning at the family's first regular reexamination following the change in family unit size. Changes effective 12/3/24 and later: Irrespective of any increase or decrease in the payment standard, if the family unit size may be used to determine the payment standard immediately, but no later than, the family's first regular reexamination following the change in family unit size.

6-IV.D. APPLYING UTILITY ALLOWANCES [24 CFR 982.517]

Overview A PHA-established utility allowance schedule is used in determining family share and PHA subsidy. A family's utility allowance is determined by the size of dwelling unit leased by a family or the voucher unit size for which the family qualifies using PHA subsidy standards, whichever is the lowest of the two. See Chapter 5 for information on the PHA's subsidy standards. For policies on establishing and updating utility allowances, see Chapter 16. Flat Fees [24 CFR 982.517(b)(2)(iii)] The PHA may base its utility allowance payments on actual flat fees charges by an owner for utilities that are billed directly by the owner, but only if the flat fee charged by the owner is no greater than the PHA's applicable utility allowance for the utilities covered by the fee. If the owner charges a flat fee for some but not all utilities, the PHA must pay a separate allowance for any tenant-paid utilities not covered in the flat fee.

The family's consumption was mistakenly portrayed as excessive due to defects in the meter or errors in the meter reading. The excessive consumption is caused by a characteristic of the unit or owner- supplied equipment that is beyond the family's control, such as a particularly inefficient refrigerator or inadequate insulation. The allowance should be adjusted to reflect the higher consumption needs associated with the unit until the situation is remedied. The resident should be granted individual relief until the allowance is adjusted. The excessive consumption is due to special needs of the family that are beyond their control, such as the need for specialized equipment in the case of a family member who is ill, elderly, or who has a disability.

In determining the amount of the reasonable accommodation or individual relief, the PHA will allow a reasonable measure of additional usage as necessary. To arrive at the amount of additional utility cost of specific equipment, the family may provide information from the manufacturer of the equipment, or the family or PHA may conduct an internet search for an estimate of usage or additional monthly cost. Information on reasonable accommodation and individual relief for charges in excess of the utility allowance will be provided to all families at admission as part of the information on payment standards and utility allowances in the briefing packet. The PHA will also provide information on utility relief programs or medical discounts (sometimes referred to as "Medical Baseline discounts") that may be available through local utility providers. At its discretion, the PHA may reevaluate the need for the increased utility allowance at any regular reexamination. If the excessive consumption is caused by a characteristic of the unit or PHA-supplied equipment that is beyond the family's control, such as a particularly inefficient refrigerator or inadequate insulation, the individual relief to the resident will cease when the situation is remedied. Utility Allowance Revisions At reexamination, the PHA must use the current utility allowance schedule [HCV GB, p. 18-8].

6-IV.E. PRORATED ASSISTANCE FOR MIXED FAMILIES [24 CFR 5.520]

HUD regulations prohibit assistance to ineligible family members. A mixed family is one that includes at least one U.S. citizen or eligible immigrant and any number of ineligible family members. The PHA must prorate the assistance provided to a mixed family. The PHA will first determine assistance as if all family members were eligible and then prorate the assistance based upon the percentage of family members that actually are eligible. For example, if the PHA subsidy for a family is calculated at $500 and two of four family members are ineligible, the PHA subsidy would be reduced to $250.

EXHIBIT 6-1: ANNUAL INCOME FULL DEFINITION 24 CFR 5.609 (a) Annual income includes, with respect to (ii) For a revocable trust under the control of the family: the family or household, any distributions from the trust; except that any actual income (1) All amounts, not specifically excluded in earned by the trust, regardless of whether it is paragraph (b) of this section, received from all distributed, shall be considered income to the sources by each member of the family who is family at the time it is received by the trust. 18 years of age or older or is the head of household or spouse of the head of household, (3) Earned income of children under the 18 plus unearned income by or on behalf of each years of age. dependent who is under 18 years of age, and (4) Payments received for the care of foster (2) When the value of net family assets children or foster adults, or State or Tribal exceeds the HUD-published threshold amount kinship or guardianship care payments. (which amount HUD will adjust annually in (5) Insurance payments and settlements for accordance with the Consumer Price Index for personal or property losses, including but not Urban Wage Earners and Clerical Workers) limited to payments through health insurance, and the actual returns from a given asset motor vehicle insurance, and workers' cannot be calculated, imputed returns on the compensation. asset based on the current passbook savings rate, as determined by HUD. (6) Amounts received by the family that are (b)Annual income does not include the following: specifically for, or in reimbursement of, the cost of health and medical care expenses for (1) Any imputed return on an asset when net any family member. family assets total are less than or equal to the HUD-published threshold amount (which (7) Any amounts recovered in any civil action amount HUD will adjust annually in or settlement based on a claim of malpractice, accordance with the Consumer Price Index for negligence, or other breach of duty owed to a Urban Wage Earners and Clerical Workers) family member arising out of law, that resulted and no actual income from the net family in a member of the family becoming disabled. assets can be determined. (8) Income of a live-in aide, foster child, or (2) The following types of trust distributions: foster adult as defined in §§ 5.403 and 5.603, respectively. (i) For an irrevocable trust or a revocable trust outside the control of the family or household (9) excluded from the definition of net family (i) Any assistance that section 479B of the assets under § 5.603(b): Higher Education Act of 1965, as amended (20 (A) Distributions of the principal or corpus of U.S.C. 1087uu), requires be excluded from a the trust; and family's income; and

(B) Distributions of income from the trust when the distributions are used to pay the costs of health and medical care expenses for a minor.

(ii) Student financial assistance for tuition, (4) Any amount of the scholarship or grant books, and supplies (including supplies and that, either by itself or in combination with equipment to support students with learning assistance excluded under this paragraph or disabilities or other disabilities), room and paragraph (b)(9)(i), exceeds the actual covered board, and other fees required and charged to a costs of the student. The actual covered costs student by an institution of higher education of the student are the actual costs of tuition, (as defined under Section 102 of the Higher books and supplies (including supplies and Education Act of 1965 (20 U.S.C. 1002)) and, equipment to support students with learning for a student who is not the head of household disabilities or other disabilities), room and or spouse, the reasonable and actual costs of board, or other fees required and charged to a housing while attending the institution of student by the education institution, and, for a higher education and not residing in an student who is not the head of household or assisted unit. spouse, the reasonable and actual costs of housing while attending the institution of (A) Student financial assistance, for purposes higher education and not residing in an of this paragraph (9)(ii), means a grant or assisted unit. This calculation is described scholarship received from— ( further in paragraph (b)(9)(ii)€ of this section. 1) The Federal government; (C) Student financial assistance, for purposes (2) A State, Tribe, or local government; of this paragraph (b)(9)(ii) must be: (3) A private foundation registered as a (1) Expressly for tuition, books, room and nonprofit under 26 U.S.C. 501(c)(3); board, or other fees required and charged to a student by the education institution; (4) A business entity (such as corporation, general partnership, limited liability company, (2) Expressly to assist a student with the costs limited partnership, joint venture, business of higher education; or trust, public benefit corporation, or nonprofit (3) Expressly to assist a student who is not the entity); or head of household or spouse with the (5) An institution of higher education. reasonable and actual costs of housing while attending the education institution and not (B) Student financial assistance, for purposes residing in an assisted unit. of this paragraph (9)(ii), does not include— (D) Student financial assistance, for purposes (1) Any assistance that is excluded pursuant to of this paragraph (b)(9)(ii), may be paid paragraph (b)(9)(i) of this section; directly to the student or to the educational (2) Financial support provided to the student in institution on the student's behalf. Student the form of a fee for services performed (e.g., financial assistance paid to the student must be a work study or teaching fellowship that is not verified by the responsible entity as student excluded pursuant to paragraph (b)(9)(i) of this financial assistance consistent with this section); ( paragraph (b)(9)(ii). 3) Gifts, including gifts from family or friends; (E) When the student is also receiving or assistance excluded under paragraph (b)(9)(i) of this section, the amount of student financial assistance under this paragraph (b)(9)(ii) is determined as follows:

(1) If the amount of assistance excluded under (ii) Amounts received by a participant in other paragraph (b)(9)(i) of this section is equal to or publicly assisted programs which are exceeds the actual covered costs under specifically for or in reimbursement of out-of- paragraph (b)(9)(ii)(B)(4) of this section, none pocket expenses incurred (e.g., special of the assistance described in this paragraph equipment, clothing, transportation, childcare, (b)(9)(ii) of this section is considered student etc.) and which are made solely to allow financial assistance excluded from income participation in a specific program; under this paragraph (b)(9)(ii)(E). (iii) Amounts received under a resident service (2) If the amount of assistance excluded under stipend not to exceed $200 per month. A paragraph (b)(9)(i) of this section is less than resident service stipend is a modest amount the actual covered costs under paragraph received by a resident for performing a service (b)(9)(ii)(B)(4) of this section, the amount of for the PHA or owner, on a part-time basis, assistance described in paragraph (b)(9)(ii) of that enhances the quality of life in the this section that is considered student financial development. assistance excluded under this paragraph is the (iv) Incremental earnings and benefits lower of: resulting to any family member from (i) the total amount of student financial participation in training programs funded by assistance received under this paragraph HUD or in qualifying Federal, State, Tribal, or (b)(9)(ii) of this section, or local employment training programs (including training programs not affiliated (ii) the amount by which the actual covered with a local government) and training of a costs under paragraph (b)(9)(ii)(B)(4) of this family member as resident management staff. section exceeds the assistance excluded under Amounts excluded by this provision must be paragraph (b)(9)(i) of this section. received under employment training programs (10) Income and distributions from any with clearly defined goals and objectives and Coverdell education savings account under are excluded only for the period during which section 530 of the Internal Revenue Code of the family member participates in the 1986 or any qualified tuition program under employment training program unless those section 529 of such Code; and income earned amounts are excluded under paragraph by government contributions to, and (b)(9)(i) of this section. distributions from, "baby bond" accounts (13) Reparation payments paid by a foreign created, authorized, or funded by Federal, government pursuant to claims filed under the State, or local government. laws of that government by persons who were (11) The special pay to a family member persecuted during the Nazi era. serving in the Armed Forces who is exposed to (14) Earned income of dependent fulltime hostile fire. students in excess of the amount of the (12) deduction for a dependent in § 5.611. (i) Amounts received by a person with a (15) Adoption assistance payments for a child disability that are disregarded for a limited in excess of the amount of the deduction for a time for purposes of Supplemental Security dependent in § 5.611. Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS);

(16) Deferred periodic amounts from (22) Amounts that HUD is required by Federal Supplemental Security Income and Social statute to exclude from consideration as Security benefits that are received in a lump income for purposes of determining eligibility sum amount or in prospective monthly or benefits under a category of assistance amounts, or any deferred Department of programs that includes assistance under any Veterans Affairs disability benefits that are program to which the exclusions set forth in received in a lump sum amount or in paragraph (b) of this section apply. HUD will prospective monthly amounts. publish a notice in the Federal Register to identify the benefits that qualify for this (17) Payments related to aid and attendance exclusion. Updates will be published when under 38 U.S.C. 1521 to veterans in need of necessary. regular aid and attendance. (23) Replacement housing "gap" payments (18) Amounts received by the family in the made in accordance with 49 CFR part 24 that form of refunds or rebates under State or local offset increased out of pocket costs of law for property taxes paid on the dwelling displaced persons that move from one unit. federally subsidized housing unit to another (19) Payments made by or authorized by a Federally subsidized housing unit. Such State Medicaid agency (including through a replacement housing "gap" payments are not managed care entity) or other State or Federal excluded from annual income if the increased agency to a family to enable a family member cost of rent and utilities is subsequently who has a disability to reside in the family's reduced or eliminated, and the displaced assisted unit. Authorized payments may person retains or continues to receive the include payments to a member of the assisted replacement housing "gap" payments. family through the State Medicaid agency (24) Nonrecurring income, which is income (including through a managed care entity) or that will not be repeated in the coming year other State or Federal agency for caregiving based on information provided by the family. services the family member provides to enable Income received as an independent contractor, a family member who has a disability to reside day laborer, or seasonal worker is not excluded in the family's assisted unit. from income under this paragraph, even if the (20) Loan proceeds (the net amount disbursed source, date, or amount of the income varies. by a lender to or on behalf of a borrower, Nonrecurring income includes: under the terms of a loan agreement) received (i) Payments from the U.S. Census Bureau for by the family or a third party (e.g., proceeds employment (relating to decennial census or received by the family from a private loan to the American Community Survey) lasting no enable attendance at an educational institution longer than 180 days and not culminating in or to finance the purchase of a car). permanent employment. (21) Payments received by Tribal members as (ii) Direct Federal or State payments intended a result of claims relating to the for economic stimulus or recovery. mismanagement of assets held in trust by the United States, to the extent such payments are (iii) Amounts directly received by the family also excluded from gross income under the as a result of State refundable tax credits or Internal Revenue Code or other Federal law. State tax refunds at the time they are received.

(iv) Amounts directly received by the family accounts shall be income at the time they are as a result of Federal refundable tax credits received by the family. and Federal tax refunds at the time they are (27) Income earned on amounts placed in a received. family's Family Self Sufficiency Account. (v) Gifts for holidays, birthdays, or other (28) Gross income a family member receives significant life events or milestones (e.g., through self-employment or operation of a wedding gifts, baby showers, anniversaries). business; except that the following shall be (vi) Non-monetary, in-kind donations, such as considered income to a family member: food, clothing, or toiletries, received from a (i) Net income from the operation of a food bank or similar organization. business or profession. Expenditures for (vii) Lump-sum additions to net family assets, business expansion or amortization of capital including but not limited to lottery or other indebtedness shall not be used as deductions in contest winnings. determining net income. An allowance for depreciation of assets used in a business or (25) Civil rights settlements or judgments, profession may be deducted, based on straight including settlements or judgments for back line depreciation, as provided in Internal pay. Revenue Service regulations; and (26) Income received from any account under (ii) Any withdrawal of cash or assets from the a retirement plan recognized as such by the operation of a business or profession will be Internal Revenue Service, including individual included in income, except to the extent the retirement arrangements (IRAs), employer withdrawal is reimbursement of cash or assets retirement plans, and retirement plans for self- invested in the operation by the family. employed individuals; except that any distribution of periodic payments from such

EXHIBIT 6-2: TREATMENT OF FAMILY ASSETS 24 CFR 5.603(b) Net Family Assets (1) Net family assets is the net cash value of arrangements (IRAs), employer retirement all assets owned by the family, after plans, and retirement plans for self- deducting reasonable costs that would be employed individuals; (iv) The value of real incurred in disposing real property, savings, property that the family does not have the stocks, bonds, and other forms of capital effective legal authority to sell in the investment. jurisdiction in which the property is located; (v) Any amounts recovered in any civil (2) In determining net family assets, PHAs action or settlement based on a claim of or owners, as applicable, must include the malpractice, negligence, or other breach of value of any business or family assets duty owed to a family member arising out of disposed of by an applicant or tenant for less law, that resulted in a family member being than fair market value (including a a person with a disability; (vi) The value of disposition in trust, but not in a foreclosure any Coverdell education savings account or bankruptcy sale) during the two years under section 530 of the Internal Revenue preceding the date of application for the Code of 1986, the value of any qualified program or reexamination, as applicable, in tuition program under section 529 of such excess of the consideration received Code, the value of any Achieving a Better therefor. In the case of a disposition as part Life Experience (ABLE) account authorized of a separation or divorce settlement, the under Section 529A of such Code, and the disposition will not be considered to be for value of any "baby bond" account created, less than fair market value if the applicant or authorized, or funded by Federal, State, or tenant receives consideration not measurable local government. (vii) Interests in Indian in dollar terms. Negative equity in real trust land; (viii) Equity in a manufactured property or other investments does not home where the family receives assistance prohibit the owner from selling the property under 24 CFR part 982; (ix) Equity in or other investments, so negative equity property under the Homeownership Option alone would not justify excluding the for which a family receives assistance under property or other investments from family 24 CFR part 982; (x) Family Self- assets. Sufficiency Accounts; and (xi) Federal tax (3) Excluded from the calculation of net refunds or refundable tax credits for a period family assets are: (i) The value of necessary of 12 months after receipt by the family. items of personal property; (ii) The (4) In cases where a trust fund has been combined value of all nonnecessary items of established and the trust is not revocable by, personal property if the combined total value or under the control of, any member of the does not exceed the HUD-published family or household, the trust fund is not a threshold amount (which amount will be family asset and the value of the trust is not adjusted by HUD in accordance with the included in the calculation of net family Consumer Price Index for Urban Wage assets, so long as the fund continues to be Earners and Clerical Workers); (iii) The held in a trust that is not revocable by, or value of any account under a retirement plan under the control of, any member of the recognized as such by the Internal Revenue family or household. Service, including individual retirement

EXHIBIT 6-3: THE EFFECT OF WELFARE BENEFIT REDUCTION 24 CFR 5.615 Public housing program and Section 8 tenant-based assistance program: How welfare benefit reduction affects family income. (a) Applicability. This section applies to (i) at expiration of a lifetime or other time covered families who reside in public housing limit on the payment of welfare benefits; (part 960 of this title) or receive Section 8 (ii) because a family member is not able to tenant-based assistance (part 982 of this title). obtain employment, even though the family (b) Definitions. The following definitions member has complied with welfare agency apply for purposes of this section: economic self-sufficiency or work activities requirements; or Covered families. Families who receive welfare assistance or other public assistance (iii) because a family member has not benefits ("welfare benefits") from a State or complied with other welfare agency other public agency ("welfare agency") under requirements. a program for which Federal, State, or local (c) Imputed welfare income. law requires that a member of the family must participate in an economic self-sufficiency (1) A family's annual income includes the program as a condition for such assistance. amount of imputed welfare income (because of a specified welfare benefits reduction, as Economic self-sufficiency program. See specified in notice to the PHA by the welfare definition at Sec. 5.603. agency), plus the total amount of other annual Imputed welfare income. The amount of income as determined in accordance with Sec. annual income not actually received by a 5.609. family, as a result of a specified welfare (2) At the request of the PHA, the welfare benefit reduction, that is nonetheless included agency will inform the PHA in writing of the in the family's annual income for purposes of amount and term of any specified welfare determining rent. benefit reduction for a family member, and the Specified welfare benefit reduction. reason for such reduction, and will also inform the PHA of any subsequent changes in the (1) A reduction of welfare benefits by the term or amount of such specified welfare welfare agency, in whole or in part, for a benefit reduction. The PHA will use this family member, as determined by the welfare information to determine the amount of agency, because of fraud by a family member imputed welfare income for a family. in connection with the welfare program; or because of welfare agency sanction against a (3) A family's annual income includes family member for noncompliance with a imputed welfare income in family annual welfare agency requirement to participate in an income, as determined at the PHA's interim or economic self-sufficiency program. regular reexamination of family income and composition, during the term of the welfare (2) "Specified welfare benefit reduction" does benefits reduction (as specified in information not include a reduction or termination of provided to the PHA by the welfare agency). welfare benefits by the welfare agency:

(4) The amount of the imputed welfare income basis for the PHA determination of the amount is offset by the amount of additional income a of imputed welfare income. Such notice shall family receives that commences after the time also state that if the family does not agree with the sanction was imposed. When such the PHA determination, the family may additional income from other sources is at request an informal hearing on the least equal to the imputed determination under the PHA hearing procedure. (5) The PHA may not include imputed welfare income in annual income if the family was not (e) PHA relation with welfare agency. an assisted resident at the time of sanction. (1) The PHA must ask welfare agencies to (d) Review of PHA decision. inform the PHA of any specified welfare benefits reduction for a family member, the (1) Public housing. If a public housing tenant reason for such reduction, the term of any such claims that the PHA has not correctly reduction, and any subsequent welfare agency calculated the amount of imputed welfare determination affecting the amount or term of income in accordance with HUD requirements, a specified welfare benefits reduction. If the and if the PHA denies the family's request to welfare agency determines a specified welfare modify such amount, the PHA shall give the benefits reduction for a family member, and tenant written notice of such denial, with a gives the PHA written notice of such brief explanation of the basis for the PHA reduction, the family's annual incomes shall determination of the amount of imputed include the imputed welfare income because of welfare income. The PHA notice shall also the specified welfare benefits reduction. state that if the tenant does not agree with the PHA determination, the tenant may request a (2) The PHA is responsible for determining grievance hearing in accordance with part 966, the amount of imputed welfare income that is subpart B of this title to review the PHA included in the family's annual income as a determination. The tenant is not required to result of a specified welfare benefits reduction pay an escrow deposit pursuant to Sec. as determined by the welfare agency, and 966.55(e) for the portion of tenant rent specified in the notice by the welfare agency to attributable to the imputed welfare income in the PHA. However, the PHA is not responsible order to obtain a grievance hearing on the for determining whether a reduction of welfare PHA determination. benefits by the welfare agency was correctly determined by the welfare agency in (2) Section 8 participant. A participant in the accordance with welfare program requirements Section 8 tenant-based assistance program and procedures, nor for providing the may request an informal hearing, in opportunity for review or hearing on such accordance with Sec. 982.555 of this title, to welfare agency determinations. review the PHA determination of the amount of imputed welfare income that must be (3) Such welfare agency determinations are included in the family's annual income in the responsibility of the welfare agency, and accordance with this section. If the family the family may seek appeal of such claims that such amount is not correctly determinations through the welfare agency's calculated in accordance with HUD normal due process procedures. The PHA shall requirements, and if the PHA denies the be entitled to rely on the welfare agency notice family's request to modify such amount, the to the PHA of the welfare agency's PHA shall give the family written notice of determination of a specified welfare benefits such denial, with a brief explanation of the reduction.

VERIFICATION [24 CFR 982.516, 24 CFR 982.551, 24 CFR 5.230, Notice PIH 2023-27]

Introduction

Prior to the Authority's HOTMA compliance date, the Authority will follow policies as outlined in this chapter. Upon the Authority's HOTMA compliance date, the Authority will follow policies as outlined in Chapter 7.B. The PHA must verify all information that is used to establish the family's eligibility and level of assistance and is required to obtain written authorization from the family in order to collect the information. Applicants and program participants must cooperate with the verification process as a condition of receiving assistance. The PHA must not pass on the cost of verification to the family. The PHA must follow the verification guidance provided by HUD in Notice PIH 2023-27 and any subsequent guidance issued by HUD. This chapter summarizes those requirements and provides supplementary PHA policies. Part I describes the general verification process. Part II provides more detailed requirements related to family information. Part III provides information on income and assets, and Part IV covers mandatory deductions. with disabilities. All information obtained through the verification process will be handled in accordance with the records management policies of the PHA.

Part I: General Verification Requirements

7-I.A. FAMILY CONSENT TO RELEASE OF INFORMATION [24 CFR 982.516;

982.551; CFR 5.230; and Notice PIH 2023-27] Consent Forms The family must supply any information that the PHA or HUD determines is necessary to the administration of the program and must consent to PHA verification of that information [24 CFR 982.551]. All adult family members must sign consent forms as needed to collect information relevant to the family's eligibility and level of assistance. While PHAs must use form HUD- 9886-A, this form does not release all the information necessary to the administration of the program. The PHA must also develop its own release forms to cover all other necessary information.

Form HUD-9886-A [24 CFR 5.230(b)(1), b(2), (c)(4), and (c)(5); and Notice PIH 2023-27] All adult applicants and participants sign form HUD-9886-A, Authorization for Release of Information. All adult family members (and the head and spouse/cohead, regardless of age) are required to sign the Form HUD-9886-A at admission. Participants, prior to January 1, 2024, signed and submitted Form HUD-9886-A at each annual reexamination. HOTMA eliminated this requirement and instead required that the Form HUD-9886-A be signed only once. On or after January 1, 2024 (regardless of the PHA's HOTMA compliance date), current program participants must sign and submit a new Form HUD-9886-A at their next interim or annual reexamination. This form will only be signed once. Another Form HUD-9886-A will not be submitted to the PHA except under the following circumstances:

• When any person 18 years or older becomes a member of the family;
• When a current member of the family turns 18; or
• As required by HUD or the PHA in administrative instructions.

The PHA has the discretion to establish policies around when family members must sign consent forms when they turn 18. PHAs must establish these policies stating when family members will be required to sign consent forms at intervals other than at reexamination.

7-I.B. Overview Of Verification Requirements

Use of Other Programs' Income Determinations [24 CFR 5.609(c)(3) and Notice PIH 2023- 27] PHAs may, but are not required to, determine a family's annual income, including income from assets, prior to the application of any deductions, based on income determinations made within the previous 12-month period, using income determinations from means-tested federal public assistance programs. PHAs are not required to accept or use determinations of income from other federal means-tested forms of assistance. If the PHA adopts a policy to accept this type of verification, the PHA must establish in policy when they will accept Safe Harbor income determinations and from which programs. PHAs must also create policies that outline the course of action when families present multiple verifications from the same or different acceptable Safe Harbor programs. Means-tested federal public assistance programs include:

• Temporary Assistance for Needy Families (TANF) (42 U.S.C. 601, et seq.);
• Medicaid (42 U.S.C. 1396 et seq.);
• Supplemental Nutrition Assistance Program (SNAP) (42 U.S.C. 2011 et seq.);
• Earned Income Tax Credit (EITC) (26 U.S.C. 32);
• Low-Income Housing Tax Credit (LIHTC) program (26 U.S.C. 42);
• Special Supplemental Nutrition Program for Woman, Infants, and Children (WIC)

(42 U.S.C. 1786);

• Supplemental Security Income (SSI) (42 U.S.C. 1381 et seq.);
• Other programs administered by the HUD Secretary;
• Other means-tested forms of federal public assistance for which HUD has established a

memorandum of understanding; and

• Other federal benefit determinations made in other forms of means-tested federal public

assistance that the Secretary determines to have comparable reliability and announces through the Federal Register.

If the PHA elects to use the annual income determination from one of the above-listed forms of means-tested federal public assistance, then they must obtain the income information by means of a third-party verification. The third-party verification must state the family size, must be for the entire family, and must state the amount of the family's annual income. The annual income need not be broken down by family member or income type. Annual income includes income earned from assets, therefore when using Safe Harbor to verify a family's income, PHAs will neither further inquire about a family's net family assets, nor about the income earned from those assets, except with respect to whether or not the family owns assets that exceed the asset limitation in 24 CFR 5.618. The Safe Harbor documentation will be considered acceptable if any of the following dates fall into the 12-month period prior to the receipt of the documentation by the PHA:

• Income determination effective date;
• Program administrator's signature date;
• Family's signature date;
• Report effective date; or
• Other report-specific dates that verify the income determination date.

The only information that PHAs are permitted to use to determine income under this method is the total income determination made by the federal means-tested program administrator. Other federal programs may provide additional information about income inclusions and exclusions in their award letters; however, these determinations and any other information must not be considered by the PHA. PHAs are not permitted to mix and match Safe Harbor income determinations and other income verifications. If the PHA is unable to obtain Safe Harbor documentation or if the family disputes the other program's income determination, the PHA must calculate the family's annual income using traditional methods as outlined in Notice PIH 2023-27 and this chapter. If the PHA uses a Safe Harbor determination to determine the family's income, the family is obligated to report changes in income that meet the PHA's reporting requirement and occur after the effective date of the transaction. The amounts of unreimbursed reasonable attendant care expenses and child-care expenses deducted from a family's annual income, except for when a family is approved for a child-care expense hardship exemption, must still be capped by the amount earned by any family member who is enabled to work as a result of the expense. PHAs are therefore required to obtain third- party verification of the applicable employment income and cap the respective expense deductions accordingly.

family presents acceptable evidence that the Authority should consider an alternative verification from a different Safe Harbor source. When the Authority uses a Safe Harbor income determination from another program, and the family's income subsequently changes, the family is required to report the change to the Authority. Depending on when the change occurred, the change may or may not impact the Authority's calculation of the family's total annual income. Changes that occur between the time the Authority receives the Safe Harbor documentation and the effective date of the family's annual reexamination will not be considered. If the family has a change in income that occurs after the annual reexamination effective date, the Authority will conduct an interim reexamination if the change meets the requirements for performing an interim reexamination as outlined in Chapter 11. In this case, the Authority will use third-party verification to verify the change. HUD's Verification Hierarchy [Notice PIH 2018-18] HUD mandates the use of the EIV system and offers administrative guidance on the use of other methods to verify family information and specifies the circumstances in which each method will be used. In general HUD requires the PHA to use the most reliable form of verification that is available and to document the reasons when the PHA uses a lesser form of verification. In order of priority, the forms of verification that the PHA will use are:

• Up-front Income Verification (UIV) using HUD's Enterprise Income Verification (EIV)

system

• Up-front Income Verification (UIV) using a non-HUD system
• Written Third-Party Verification (may be provided by applicant or participant)
• Written Third-party Verification Form
• Oral Third-party Verification
• Self-Certification

Each of the verification methods is discussed in subsequent sections below. Requirements for Acceptable Documents

the PHA has followed all of the verification policies set forth in this plan. The record should be sufficient to enable a staff member or HUD reviewer to understand the process followed and conclusions reached.

7-I.C. UP-FRONT INCOME VERIFICATION (UIV)

Up-front income verification (UIV) refers to the PHA's use of the verification tools available from independent sources that maintain computerized information about earnings and benefits. UIV will be used to the extent that these systems are available to the PHA. There may be legitimate differences between the information provided by the family and UIV- generated information. If the family disputes the accuracy of UIV data, no adverse action can be taken until the PHA has independently verified the UIV information and the family has been granted an opportunity to contest any adverse findings through the informal review/hearing process of the PHA. See Chapter 6 for the PHA's policy on the use of UIV/EIV to project annual income. Upfront Income Verification Using HUD's Enterprise Income Verification (EIV) System (Mandatory) PHAs must use HUD's EIV system in its entirety as a third-party source to verify tenant employment and income information during mandatory reexaminations or recertifications of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. However, the PHA is not required to verify income information in EIV at annual reexam when Safe Harbor verification is used to determine a family's income [Notice PIH 2023- 27]. The EIV system contains data showing earned income, unemployment benefits, social security benefits, and SSI benefits for participant families. The following policies apply to the use of HUD's EIV system. EIV Income and IVT Reports The data shown on income and income validation tool (IVT) reports is updated quarterly. Data may be between 3 and 6 months old at the time reports are generated.

annual reexamination process. Income reports may be used in the calculation of annual income, as described in Chapter 6-I.C. Income reports may also be used to meet the regulatory requirement for third party verification, as described above. Policies for resolving discrepancies between income reports and family-provided information will be resolved as described in Chapter 6-I.C. and in this chapter. discrepancies between reported income and income shown in the EIV system, and as necessary to verify earned income, and to verify and calculate unemployment benefits, Social Security and/or SSI benefits. EIV will also be used to verify that families claiming zero income are not receiving income from any of these sources. interim reexamination documents. When the Authority determines through EIV reports and third-party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 14, Program Integrity. However, the Authority will not use income information in EIV at annual reexam when Safe Harbor verification is used to determine a family's income. The Authority will not accept other programs' determinations of income (safe harbor) for any new admission or interim reexamination. EIV Identity Verification The EIV system verifies tenant identities against SSA records. These records are compared to PIC data for a match on social security number, name, and date of birth. PHAs are required to use EIV's Identity Verification Report on a monthly basis to improve the availability of income information in EIV [Notice PIH 2018-18]. When identity verification for a participant fails, a message will be displayed within the EIV system and no income information will be displayed.

7-I.D. THIRD-PARTY WRITTEN AND ORAL VERIFICATION

HUD's current verification hierarchy defines two types of written third-party verification. The more preferable form, "written third-party verification," consists of an original document generated by a third-party source, which may be received directly from a third-party source or provided to the PHA by the family. If written third-party verification is not available, the PHA must attempt to obtain a "written third-party verification form." This is a standardized form used to collect information from a third party. Written Third-Party Verification [Notice PIH 2018-18] Written third-party verification documents must be original and authentic and may be supplied by the family or received from a third-party source. Examples of acceptable tenant-provided documents include, but are not limited to: pay stubs, payroll summary reports, employer notice or letters of hire and termination, SSA benefit verification letters, bank statements, child support payment stubs, welfare benefit letters and/or printouts, and unemployment monetary benefit notices. The PHA is required to obtain, at minimum, two current and consecutive pay stubs for determining annual income from wages. The PHA may reject documentation provided by the family if the document is not an original, if the document appears to be forged, or if the document is altered, mutilated, or illegible. Written, third-party verification includes an original or authentic document generated by a third- party source dated within 120 days of the date received by the PHA [Notice PIH 2023-27]. PHAs may accept a statement dated within the appropriate benefit year for fixed income sources [Notice PIH 2023-27].

Written Third-Party Verification Form When upfront verification is not available and the family is unable to provide written third-party documents, the PHA must request a written third-party verification form. HUD's position is that this traditional third-party verification method presents administrative burdens and risks which may be reduced through the use of family-provided third-party documents. PHAs may mail or email third-party written verification form requests to third-party sources.

Primary Documents Third-party verification is not required when legal documents are the primary source, such as a birth certificate or other legal documentation of birth. Imputed Assets HUD permits PHAs to accept a self-certification from a family as verification of assets disposed of for less than fair market value [HCV GB, p. 5-28].

7-I.E. SELF-CERTIFICATION

When HUD requires third-party verification, self-certification or "tenant declaration," is used as a last resort when the PHA is unable to obtain third-party verification. Self-certification, however, is an acceptable form of verification when:

• A source of income is fully excluded
• Net family assets total $5,000 or less and the PHA has adopted a policy to accept self

certification at annual recertification, when applicable

• The PHA has adopted a policy to implement streamlined annual recertifications for fixed

sources of income (See Chapter 11) When the PHA was required to obtain third-party verification but instead relies on a tenant declaration for verification of income, assets, or expenses, the family's file must be documented to explain why third-party verification was not available.

Part Ii: Verifying Family Information

7-II.A. VERIFICATION OF LEGAL IDENTITY

Children Certificate of birth, naturalization papers Certificate of birth Church issued baptismal certificate Adoption papers Current, valid driver's license or Custody agreement Department of Motor Vehicles Health and Human Services ID identification card Certified school records U.S. military discharge (DD 214) Current U.S. passport Current employer identification card with picture Current government employer identification card with picture If a document submitted by a family is illegible for any reason or otherwise questionable, more than one of these documents may be required. If none of these documents can be provided and at the PHA's discretion, a third party who knows the person may attest to the person's identity. The certification must be provided in a format acceptable to the PHA and must be signed by the family member whose information or status is being verified. Legal identity will be verified for all applicants at the time of eligibility determination and in cases where the PHA has reason to doubt the identity of a person representing themselves to be a participant.

7-II.B. SOCIAL SECURITY NUMBERS [24 CFR 5.216, Notice PIH 2023-27]

The family must provide documentation of a valid Social Security number (SSN) for each member of the household, with the exception of individuals who do not contend eligible immigration status. Exemptions also include existing program participants who were at least 62 years of age as of January 31, 2010, and had not previously disclosed an SSN. Note that an individual who previously declared to have eligible immigration status may not change their declaration for the purpose of avoiding compliance with the SSN disclosure and documentation requirements or penalties associated with noncompliance with these requirements. Nor may the head of household opt to remove a household member from the family composition for this purpose.

The PHA must accept the following documentation as acceptable evidence of the social security number:

• An original SSN card issued by the Social Security Administration (SSA)
• An original SSA-issued document, which contains the name and SSN of the individual
• An original document issued by a federal, state, or local government agency, which contains

the name and SSN of the individual While PHAs must attempt to gather third-party verification of SSNs prior to admission as listed above, PHAs also have the option of accepting a self-certification and a third-party document (such as a bank statement, utility or cell phone bill, or benefit letter) with the applicant's name printed on it to satisfy the SSN disclosure requirement if the PHA has exhausted all other attempts to obtain the required documentation. If verifying an individual's SSN using this method, the PHA must document why the other SSN documentation was not available [Notice PIH 2023-27].

If an applicant family includes a child under 6 years of age who joined the household within the 6 months prior to the date of voucher issuance, an otherwise eligible family may be admitted to the program and the family must provide documentation of the child's SSN within 90 days of the effective date of the initial HAP contract. A 90-day extension will be granted if the PHA determines that the participant's failure to comply was due to unforeseen circumstances and was outside of the participant's control.

7-II.C. DOCUMENTATION OF AGE

A birth certificate or other official record of birth is the preferred form of age verification for all family members. For elderly family members an original document that provides evidence of the receipt of social security retirement benefits is acceptable.

7-II.D. FAMILY RELATIONSHIPS

Applicants and program participants are required to identify the relationship of each household member to the head of household. Definitions of the primary household relationships are provided in the Eligibility chapter.

A copy of a court-ordered maintenance or other court record is required to document a separation. If no court document is available, documentation from a community-based agency will be accepted. Absence of Adult Member

7-II.E. VERIFICATION OF STUDENT STATUS

General Requirements

The student is married. The student has at least one dependent child, as defined in section 3-II.E. The student is a person with disabilities, as defined in section 3-II.E, and was receiving assistance prior to November 30, 2005. If the PHA cannot verify at least one of these exemption criteria, the PHA will conclude that the student is subject to the restrictions on assistance at 24 CFR 5.612. In addition to verifying the student's income eligibility, the PHA will then proceed to verify either the student's parents' income eligibility (see section 7-III.J) or the student's independence from their parents (see below). Independent Student

7-II.F. DOCUMENTATION OF DISABILITY

The PHA must verify the existence of a disability in order to allow certain income disallowances and deductions from income. The PHA is not permitted to inquire about the nature or extent of a person's disability [24 CFR 100.202(c)]. The PHA may not inquire about a person's diagnosis or details of treatment for a disability or medical condition. If the PHA receives a verification document that provides such information, the PHA will not place this information in the tenant file. Under no circumstances will the PHA request a participant's medical record(s). For more information on health care privacy laws, see the Department of Health and Human Services' website at http://www.hhs.gov/ocr/privacy/. The above cited regulation does not prohibit the following inquiries, provided these inquiries are made of all applicants, whether or not they are persons with disabilities [VG, p. 24]:

• Inquiry into an applicant's ability to meet the requirements of ownership or tenancy
• Inquiry to determine whether an applicant is qualified for a dwelling available only to

persons with disabilities or to persons with a particular type of disability

• Inquiry to determine whether an applicant for a dwelling is qualified for a priority

available to persons with disabilities or to persons with a particular type of disability

• Inquiring whether an applicant for a dwelling is a current illegal abuser or addict of a

controlled substance

• Inquiring whether an applicant has been convicted of the illegal manufacture or

distribution of a controlled substance Family Members Receiving SSA Disability Benefits sufficient verification of disability for the purpose of qualifying for waiting list preferences (if applicable) or certain income disallowances and deductions [VG, p. 23].

7-II.G. CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS [24 CFR 5.508]

Overview Housing assistance is not available to persons who are not citizens, nationals, or eligible immigrants. Prorated assistance is provided for "mixed families" containing both eligible and ineligible persons. A detailed discussion of eligibility requirements is in the Eligibility chapter. This verifications chapter discusses HUD and PHA verification requirements related to citizenship status. The family must provide a certification that identifies each family member as a U.S. citizen, a U.S. national, an eligible noncitizen or an ineligible noncitizen and submit the documents discussed below for each family member. Once eligibility to receive assistance has been verified for an individual it need not be collected or verified again during continuously-assisted occupancy. [24 CFR 5.508(g)(5)] U.S. Citizens and Nationals HUD requires a declaration for each family member who claims to be a U.S. citizen or national. The declaration must be signed personally by any family member 18 or older and by a guardian for minors. The PHA may request verification of the declaration by requiring presentation of a birth certificate, United States passport or other appropriate documentation.

7-II.H. VERIFICATION OF PREFERENCE STATUS

The PHA must verify all preferences claimed by an applicant that determined placement on the waiting list.

PART III: VERIFYING INCOME AND ASSETS

Chapter 6 of this plan describes in detail the types of income that are included and excluded and how assets and income from assets are handled. Any income reported by the family must be verified. This part provides PHA policies that supplement the general verification procedures specified in Part I of this chapter.

7-III.A. EARNED INCOME

Tips

7-III.B. BUSINESS AND SELF EMPLOYMENT INCOME

The business owner/self-employed person will be required to submit the information requested and to certify to its accuracy at all future reexaminations declaring their income and expenses. At any reexamination the Authority may request documents that support submitted financial statements such as manifests, appointment books, cash books, or bank statements. If a family member has been self-employed less than three (3) months, the Authority will accept the family member's certified estimate of income and schedule an interim reexamination in three (3) months. If the family member has been self-employed for three (3) to twelve (12) months the Authority will require the family to provide documentation of income and expenses for this period and use that information to project income.

7-III.C. PERIODIC PAYMENTS AND PAYMENTS IN LIEU OF EARNINGS

For policies governing streamlined income determinations for fixed sources of income, please see Chapter 11. Social Security/SSI Benefits [Notice PIH 2023-27] benefits differ for applicants and participants. For applicants, since EIV does not contain SS or SSI benefit information, the PHA must ask applicants to provide a copy of their current SS and/or SSI benefit letter (dated within the last 120 calendar days) for each family member that receives SS and/or SSI benefits. If the family is unable to provide the document or documents, the PHA should help the applicant request a benefit verification letter from SSA's website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. The PHA must obtain the original benefit letter from the applicant, make a photocopy of the document for the file, and return the original to the family. For participants, the PHA must obtain information through the HUD EIV system and confirm with the participants that the current listed benefit amount is correct.

• If the participant agrees with the amount reported in EIV, the PHA must use the EIV-

reported gross benefit amount to calculate annual income from Social Security. PHAs are required to use the EIV-reported SS and SSI benefit amounts when calculating income unless the tenant disputes the EIV-reported amount. For example, an SSA benefit letter may list the monthly benefit amount as $450.80 and EIV displays the amount as $450.00. The PHA must use the EIV-reported amount unless the participant disputes the amount.

• If the participant disputes the EIV-reported benefit amount, or if benefit information is not

available in EIV, the PHA must request a current SSA benefit verification letter (dated within the last 120 calendar days) from each family member that receives SS and/or SSI benefits. If the family is unable to provide the document or documents, the PHA should help the participant request a benefit verification letter from SSA's website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. The PHA must obtain the original benefit letter from the participant, make a photocopy of the document for the file, and return the original to the family. Photocopies of social security checks or bank statements are not acceptable forms of verification for SS/SSI benefits.

7-III.D. ALIMONY OR CHILD SUPPORT

Annual income includes "all amounts received," not the amount that a family may be legally entitled to receive but which they do not receive. For example, a family's child support or alimony income must be based on payments received, not the amounts to which the family is entitled by court or agency orders. A copy of a court order or other written payment agreement alone may not be sufficient verification of amounts received by a family.

7-III.E. ASSETS AND INCOME FROM ASSETS

Assets Disposed of for Less than Fair Market Value The family must certify whether any assets have been disposed of for less than fair market value in the preceding two years. The PHA needs to verify only those certifications that warrant documentation [HCV GB, p. 5-28].

Example 1: An elderly participant reported a $10,000 certificate of deposit at the last annual reexamination and the PHA verified this amount. Now the person reports that she has given this $10,000 to her son. The PHA has a reasonable estimate of the value of the asset; therefore, reverification of the value of the asset is not necessary. Example 2: A family member has disposed of its 1/4 share of real property located in a desirable area and has valued her share at approximately $5,000. Based upon market conditions, this declaration does not seem realistic. Therefore, the PHA will verify the value of this asset.

7-III.F. NET INCOME FROM RENTAL PROPERTY

7-III.G. RETIREMENT ACCOUNTS

7-III.H. INCOME FROM EXCLUDED SOURCES

A detailed discussion of excluded income is provided in Chapter 6, Part I. HUD guidance on verification of excluded income draws a distinction between income which is fully excluded and income which is only partially excluded. For fully excluded income, the PHA is not required to follow the verification hierarchy, document why third-party verification is not available, or report the income on the 50058. Fully excluded income is defined as income that is entirely excluded from the annual income determination (for example, food stamps, earned income of a minor, or foster care funds) [Notice PIH 2013-04]... PHAs may accept a family's signed application or reexamination form as self-certification of fully excluded income. They do not have to require additional documentation. However, if there is any doubt that a source of income qualifies for full exclusion, PHAs have the option of requiring additional verification. For partially excluded income, the PHA is required to follow the verification hierarchy and all applicable regulations, and to report the income on the 50058. Partially excluded income is defined as income where only a certain portion of what is reported by the family qualifies to be excluded and the remainder is included in annual income (for example, the income of an adult full-time student).

7-III.I. ZERO INCOME FAMILIES [Notice PIH 2023-27]

PHAs have discretion to establish reasonable procedures to manage the risk of unreported income, such as asking families to complete a zero-income worksheet at admission or periodically after admission to determine if they have any sources of unreported income or searching any UIV sources for unreported income. In calculating annual income, PHAs must not assign monetary value to nonmonetary in-kind donations from a food bank or similar organization received by the family [24 CFR § 5.609(b)(24)(vi)]. PHAs may accept a self-certification of zero income from the family without taking any additional steps to verify zero reported income. HUD does not require such self-certifications be notarized. PHAs that perform zero income reviews must update local discretionary policies, procedures, and forms. Families who begin receiving income which does not trigger an interim reexamination should no longer be considered zero income even though the family's income is not reflected on the Form HUD-50058.

7-III.J. STUDENT FINANCIAL ASSISTANCE [24 CFR 5.609(b)(9) as updated

for HOTMA] The regulations under HOTMA distinguish between two categories of student financial assistance paid to both full-time and part-time students. Any assistance to students under section 479B of the Higher Education Act of 1965 (Tile IV of the HEA) must be excluded from the family's annual income [24 CFR 5.609(b)(9)(i)]. Any other grant-in-aid, scholarship, or other assistance amounts an individual receives for the actual covered costs charged by the institute of higher education not otherwise excluded by the federally mandated income exclusions are included [24 CFR 5.609(b)(9)(ii)].

7-III.K. PARENTAL INCOME OF STUDENTS SUBJECT TO ELIGIBILITY

RESTRICTIONS If a student enrolled at an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the income of the student's parents must be considered when determining income eligibility, unless the student is determined independent from their parents or a vulnerable youth in accordance with PHA policy [24 CFR 5.612, FR Notice 4/10/06, p. 18146, and FR Notice 9/21/16]. This provision does not apply to students residing with parents who are seeking or receiving HCV assistance. It is limited to students who are seeking or receiving assistance on their own, separately from their parents.

Part Iv: Verifying Mandatory Deductions

7-IV.A. DEPENDENT AND ELDERLY/DISABLED HOUSEHOLD DEDUCTIONS

The dependent and elderly/disabled family deductions require only that the PHA verify that the family members identified as dependents or elderly/disabled persons meet the statutory definitions. No further verifications are required. Dependent Deduction See Chapter 6 for a full discussion of this deduction. The PHA must verify that:

• Any person under the age of 18 for whom the dependent deduction is claimed is not the head,

spouse, or cohead of the family and is not a foster child

• Any person age 18 or older for whom the dependent deduction is claimed is not a foster adult

or live-in aide, and is a person with a disability or a full time student Elderly/Disabled Family Deduction See Eligibility chapter for a definition of elderly and disabled families and Chapter 6 for a discussion of the deduction. The PHA must verify that the head, spouse, or cohead is 62 years of age or older or a person with disabilities.

7-IV.B. HEALTH AND MEDICAL CARE EXPENSE DEDUCTION

Policies related to health and medical care expenses are found in Chapter 6. The amount of the deduction will be verified following the standard verification procedures described in Part I. Amount of Expense

• The household is eligible for the deduction.
• The costs to be deducted are qualified health and medical care expenses.
• The expenses are not paid for or reimbursed by any other source.
• Costs incurred in past years are counted only once.

Eligible Household The health and medical care expense deduction is permitted only for households in which the head, spouse, or cohead is at least 62, or a person with disabilities. The PHA must verify that the family meets the definition of an elderly or disabled family provided in the Eligibility chapter and as described in Chapter 7 (7-IV.A.) of this plan. Qualified Expenses To be eligible for the health and medical care expense deduction, the costs must qualify as health and medical care expenses. See Chapter 6 for the PHA's policy on what counts as a health and medical care expense. Unreimbursed Expenses To be eligible for the health and medical care expense deduction, the costs must not be reimbursed by another source.

7-IV.C. DISABILITY ASSISTANCE EXPENSES

Policies related to disability assistance expenses are found in 6-II.E. The amount of the deduction will be verified following the standard verification procedures described in Part I. Amount of Expense Attendant Care

• The family member for whom the expense is incurred is a person with disabilities (as

described in 7-II.F above).

• The expense permits a family member, or members, to work (as described in Chapter 6.).
• The expense is not reimbursed from another source (as described in Chapter 6.).

Family Member is a Person with Disabilities To be eligible for the disability assistance expense deduction, the costs must be incurred for attendant care or auxiliary apparatus expense associated with a person with disabilities. The PHA will verify that the expense is incurred for a person with disabilities (See 7-II.F.).

Family Member(s) Permitted to Work The PHA must verify that the expenses claimed actually enable a family member, or members, (including the person with disabilities) to work.

7-IV.D. CHILDCARE EXPENSES

Policies related to childcare expenses are found in Chapter 6. The amount of the deduction will be verified following the standard verification procedures described in Part I of this chapter. In addition, the PHA must verify that:

• The child is eligible for care (12 or younger).
• The costs claimed are not reimbursed.
• The costs enable a family member to work, actively seek work, or further their education.
• The costs are for an allowable type of childcare.
• The costs are reasonable.

Eligible Child To be eligible for the childcare deduction, the costs must be incurred for the care of a child under the age of 13. The PHA will verify that the child being cared for (including foster children) is under the age of 13 (See 7-II.C.). Unreimbursed Expense To be eligible for the childcare deduction, the costs must not be reimbursed by another source.

Authority Policy

The family (and the care provider) will be required to certify that the childcare expenses are not paid or reimbursed to the family from any source. Pursuing an Eligible Activity The PHA must verify that the family member(s) that the family has identified as being enabled to seek work, pursue education, or be gainfully employed, are actually pursuing those activities.

The Authority will verify that the fees paid to the childcare provider cover only childcare costs (e.g., no housekeeping services or personal services) and are paid only for the care of an eligible child (e.g., prorate costs if some of the care is provided for ineligible family members). The Authority will verify that the childcare provider is not an assisted family member. who are expected to reside in the unit. Reasonableness of Expenses Only reasonable childcare costs can be deducted.

EXHIBIT 7-1: SUMMARY OF DOCUMENTATION REQUIREMENTS FOR NONCITIZENS [HCV GB, pp. 5-9 and 5-10]

• All noncitizens claiming eligible status must sign a declaration of eligible immigrant status

on a form acceptable to the PHA.

• Except for persons 62 or older, all noncitizens must sign a verification consent form
• Additional documents are required based upon the person's status.

Elderly Noncitizens

• A person 62 years of age or older who claims eligible immigration status also must provide

proof of age such as birth certificate, passport, or documents showing receipt of SS old-age benefits. All other Noncitizens

• Noncitizens that claim eligible immigration status also must present the applicable USCIS

document. Acceptable USCIS documents are listed below.

• Form I-551 Alien Registration Receipt • Form I-94 Arrival-Departure Record with

Card (for permanent resident aliens) no annotation accompanied by:

• Form I-94 Arrival-Departure Record • A final court decision granting asylum

annotated with one of the following: (but only if no appeal is taken);

• "Admitted as a Refugee Pursuant to • A letter from a USCIS asylum officer

Section 207" granting asylum (if application is filed on or after 10/1/90) or from a USCIS

• "Section 208" or "Asylum"

district director granting asylum

• "Section 243(h)" or "Deportation (application filed before 10/1/90);

stayed by Attorney General"

• A court decision granting withholding
• "Paroled Pursuant to Section 221 (d)(5) of deportation; or

of the USCIS"

• A letter from an asylum officer granting

withholding or deportation (if application filed on or after 10/1/90).

• Form I-688 Temporary Resident Card Form I-688B Employment Authorization Card

annotated "Section 245A" or Section 210". annotated "Provision of Law 274a. 12(11)" or "Provision of Law 274a.12".

• A receipt issued by the USCIS indicating that an application for issuance of a replacement

document in one of the above listed categories has been made and the applicant's entitlement to the document has been verified; or

• Other acceptable evidence. If other documents are determined by the USCIS to constitute

acceptable evidence of eligible immigration status, they will be announced by notice published in the Federal Register

VERIFICATION UNDER HOTMA 102/104

[24 CFR 982.516, 24 CFR 982.551, 24 CFR 5.230, Notice PIH 2023-27]

INTRODUCTION This chapter is applicable upon the Authority's HOTMA 102/104 compliance date. Prior to this date, the Authority will follow policies as outlined in Chapter 7.A. The PHA must verify all information that is used to establish the family's eligibility and level of assistance and is required to obtain written authorization from the family in order to collect the information. Applicants and program participants must cooperate with the verification process as a condition of receiving assistance. The PHA must not pass on the cost of verification to the family. The PHA must follow the verification guidance provided by HUD in Notice PIH 2023-27 and any subsequent guidance issued by HUD. This chapter summarizes those requirements and provides supplementary PHA policies. Part I describes the general verification process. Part II provides more detailed requirements related to family information. Part III provides information on income and assets, and Part IV covers mandatory deductions. with disabilities. All information obtained through the verification process will be handled in accordance with the records management policies of the PHA.

Part I: General Verification Requirements

7-I.A. FAMILY CONSENT TO RELEASE OF INFORMATION [24 CFR 982.516; 24

CFR 982.551; 24 CFR 5.230; and Notice PIH 2023-27] Consent Forms The family must supply any information that the PHA or HUD determines is necessary to the administration of the program and must consent to PHA verification of that information [24 CFR 982.551]. All adult family members must sign consent forms as needed to collect information relevant to the family's eligibility and level of assistance. While PHAs must use form HUD- 9886-A, this form does not release all the information necessary to the administration of the program. The PHA must also develop its own release forms to cover all other necessary information.

Form HUD-9886-A [24 CFR 5.230(b)(1), b(2), (c)(4), and (c)(5); and Notice PIH 2023-27] All adult applicants and participants sign form HUD-9886-A, Authorization for Release of Information. All adult family members (and the head and spouse/cohead, regardless of age) are required to sign the Form HUD-9886-A at admission. Participants, prior to January 1, 2024, signed and submitted Form HUD-9886-A at each annual reexamination. HOTMA eliminated this requirement and instead required that the Form HUD-9886-A be signed only once. On or after January 1, 2024 (regardless of the PHA's HOTMA compliance date), current program participants must sign and submit a new Form HUD-9886-A at their next interim or annual reexamination. This form will only be signed once. Another Form HUD-9886-A will not be submitted to the PHA except under the following circumstances:

• When any person 18 years or older becomes a member of the family;
• When a current member of the family turns 18; or
• As required by HUD or the PHA in administrative instructions.

The PHA has the discretion to establish policies around when family members must sign consent forms when they turn 18. PHAs must establish these policies stating when family members will be required to sign consent forms at intervals other than at reexamination.

Penalties for Failing to Consent [24 CFR 5.232] If any family member who is required to sign a consent form fails to do so, the PHA must deny admission to applicants and terminate assistance of participants. The family may request an informal review (applicants) or informal hearing (participants) in accordance with PHA procedures. However, this does not apply if the applicant, participant, or any member of their family, revokes their consent with respect to the ability of the PHA to access financial records from financial institutions, unless the PHA establishes a policy that revocation of consent to access financial records will result in denial of admission or termination of assistance [24 CFR 5.232(c)]. PHAs may not process interim or annual reexaminations of income without the family's executed consent forms.

7-I.B. USE OF OTHER PROGRAMS' INCOME DETERMINATIONS

[24 CFR 5.609(c)(3) and Notice PIH 2023-27] PHAs may, but are not required to, determine a family's annual income, including income from assets, prior to the application of any deductions, based on income determinations made within the previous 12-month period, using income determinations from means-tested federal public assistance programs. PHAs are not required to accept or use determinations of income from other federal means-tested forms of assistance. If the PHA adopts a policy to accept this type of verification, the PHA must establish in policy when they will accept Safe Harbor income determinations and from which programs. PHAs must also create policies that outline the course of action when families present multiple verifications from the same or different acceptable Safe Harbor programs. Means-tested federal public assistance programs include:

• Temporary Assistance for Needy Families (TANF) (42 U.S.C. 601, et seq.);
• Medicaid (42 U.S.C. 1396 et seq.);
• Supplemental Nutrition Assistance Program (SNAP) (42 U.S.C. 2011 et seq.);
• Earned Income Tax Credit (EITC) (26 U.S.C. 32);
• Low-Income Housing Tax Credit (LIHTC) program (26 U.S.C. 42);

• Special Supplemental Nutrition Program for Woman, Infants, and Children (WIC)

(42 U.S.C. 1786);

• Supplemental Security Income (SSI) (42 U.S.C. 1381 et seq.);
• Other programs administered by the HUD Secretary;
• Other means-tested forms of federal public assistance for which HUD has established a

memorandum of understanding; and

• Other federal benefit determinations made in other forms of means-tested federal public

assistance that the Secretary determines to have comparable reliability and announces through the Federal Register. If the PHA elects to use the annual income determination from one of the above-listed forms of means-tested federal public assistance, then they must obtain the income information by means of a third-party verification. The third-party verification must state the family size, must be for the entire family, and must state the amount of the family's annual income. The annual income need not be broken down by family member or income type. Annual income includes income earned from assets, therefore when using Safe Harbor to verify a family's income, PHAs will neither further inquire about a family's net family assets, nor about the income earned from those assets, except with respect to whether or not the family owns assets that exceed the asset limitation in 24 CFR 5.618. The Safe Harbor documentation will be considered acceptable if any of the following dates fall into the 12-month period prior to the receipt of the documentation by the PHA:

• Income determination effective date;
• Program administrator's signature date;
• Family's signature date;
• Report effective date; or
• Other report-specific dates that verify the income determination date.

The only information that PHAs are permitted to use to determine income under this method is the total income determination made by the federal means-tested program administrator. Other federal programs may provide additional information about income inclusions and exclusions in their award letters; however, these determinations and any other information must not be considered by the PHA. PHAs are not permitted to mix and match Safe Harbor income determinations and other income verifications. If the PHA is unable to obtain Safe Harbor documentation or if the family disputes the other program's income determination, the PHA must calculate the family's annual income using traditional methods as outlined in Notice PIH 2023-27 and this chapter. If the PHA uses a Safe Harbor determination to determine the family's income, the family is obligated to report changes in income that meet the PHA's reporting requirement and occur after the effective date of the transaction.

The amounts of unreimbursed reasonable attendant care expenses and child-care expenses deducted from a family's annual income, except for when a family is approved for a child-care expense hardship exemption, must still be capped by the amount earned by any family member who is enabled to work as a result of the expense. PHAs are therefore required to obtain third- party verification of the applicable employment income and cap the respective expense deductions accordingly.

7-I.C. STREAMLINED INCOME DETERMINATIONS [24 CFR 960.257(c);

Notice PIH 2023-27] HUD permits PHAs to streamline the income determination process for family members with fixed sources of income. While third-party verification of all income sources must be obtained during the intake process and every three years thereafter, in the intervening years, the PHA may determine income from fixed sources by applying a verified cost of living adjustment (COLA) or other inflationary adjustment factor. Streamlining policies are optional. The PHA may, however, obtain third-party verification of all income, regardless of the source. Further, upon request of the family, the PHA must perform third-party verification of all income sources. Fixed sources of income include Social Security and SSI benefits, pensions, annuities, disability or death benefits, and other sources of income subject to a COLA or rate of interest. The determination of fixed income may be streamlined even if the family also receives income from other non-fixed sources. Two streamlining options are available, depending upon the percentage of the family's income that is received from fixed sources. When 90 percent or more of a family's unadjusted income is from fixed sources, the PHA may apply the inflationary adjustment factor to the family's fixed-income sources, provided that the

family certifies both that 90 percent or more of their unadjusted income is fixed and that their sources of fixed income have not changed from the previous year. Sources of non-fixed income are not required to be adjusted and must not be adjusted by a COLA, but PHAs may choose to adjust sources of non-fixed income based on third-party verification. PHAs have the discretion to either adjust the non-fixed income or carry over the calculation of non-fixed income from the first year to years two and three. When less than 90 percent of a family's unadjusted income consists of fixed income, PHAs may apply a COLA to each of the family's sources of fixed income. PHAs must determine all other income using standard verification requirements as outlined in Notice PIH 2023-27.

7-I.D. VERIFICATION HIERARCHY [Notice PIH 2023-27]

When the PHA does not use a streamlined determination of income or an income determination from a means-tested federal assistance program, HUD requires the PHA to obtain third-party verification of:

• Reported family annual income;
• The value of net family assets when the net value exceeds the HUD-published threshold

amount ($50,000 for 2024 and $51,600 for 2025);

• Expenses related to deductions from annual income; and
• Other factors that affect the determination of adjusted income.

HUD mandates the use of the EIV system and offers administrative guidance on the use of other methods to verify family information and specifies the circumstances in which each method will be used. In general HUD requires the PHA to use the most reliable form of verification that is available and to document the reasons when the PHA uses a lesser form of verification. In order of priority, the forms of verification that the PHA will use are: HUD developed a hierarchy that described verification documentation from most acceptable to least acceptable. The PHA must demonstrate efforts to obtain third party verification prior to accepting self-certification except instances when self-certification is explicitly allowed.

In order of priority, the hierarchy is:

• Highest: Level 6: Up-front Income Verification (UIV) using HUD's Enterprise Income
• Highest: Level 5: Up-front Income Verification (UIV) using a non-EIV system
• High: Level 4:

- Written third-party verification from the source, also known as "family-provided verification" - Or EIV plus self-certification

• Medium: Level 3: Written third-party verification form
• Medium: Level 2: Oral third-party verification
• Low: Level 1: Self-certification (not third-party verification)

Each of the verification methods is discussed in subsequent sections below. File Documentation The PHA must document in the file how the figures used in income and rent calculations were determined. All verification attempts, information obtained, and decisions reached during the verification process will be recorded in the family's file in sufficient detail to demonstrate that the PHA has followed all of the verification policies set forth in this plan. The record should be sufficient to enable a staff member or HUD reviewer to understand the process followed and conclusions reached.

7-I.E. LEVEL 5 AND 6 VERIFICATIONS: UP-FRONT INCOME VERIFICATION (UIV)

Up-front income verification (UIV) refers to the PHA's use of the verification tools available from independent sources that maintain computerized information about earnings and benefits for a number of individuals. PHAs may use UIV sources before or during a family reexamination. UIV will be used to the extent that these systems are available to the PHA. There may be legitimate differences between the information provided by the family and UIV- generated information. If the family disputes the accuracy of UIV data, no adverse action can be taken until the PHA has independently verified the UIV information and the family has been granted an opportunity to contest any adverse findings through the informal review/hearing process of the PHA.

HUD's Enterprise Income Verification (EIV) System (Mandatory) PHAs must use HUD's EIV system in its entirety as a third-party source to verify tenant employment and income information during annual and streamlined reexaminations of family composition and income in accordance with 24 CFR 5.236 and Notice PIH 2023-27. HUD's EIV system contains data showing earned income, unemployment benefits, social security benefits, and SSI benefits for participant families. The income validation tool (IVT) in EIV provides projections of discrepant income for wages, unemployment compensation, and SSA benefits pursuant to HUD's data sharing agreements with other departments. The following policies apply to the use of HUD's EIV system. EIV Income Report PHAs are required to obtain an EIV Income Report for each family any time the PHA conducts an annual reexamination. However, PHAs are not required to use the EIV Income Report:

• At annual reexamination if the PHA used Safe Harbor verification from another means-tested

federal assistance program to determine the family's income; or

• During any interim reexaminations.

The EIV Income Report is also not available for program applicants at admission. When required to use the EIV Income Report, in order for the report to be considered current, the PHA must pull the report within 120 days of the effective date of the annual reexamination. The EIV Income Report may be used to verify and calculate income at annual reexamination if the family self-certifies that the amount is accurate and representative of current income. The family must be provided with the information in EIV.

When the Authority determines through EIV reports and third-party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 14, Program Integrity. New Hires Report [Notice PIH 2023-27] The New Hires Report identifies participant families who have new employment within the last six months. The report is updated monthly. PHAs must review this information at annual reexamination except when the PHA uses Safe Harbor verification from another means-tested federal assistance program to determine the family's income. PHAs that do not require families to undergo interim reexaminations for earned income increases after an interim decrease are not required to review this report between a family's annual reexamination. If the PHA requires an interim for increases in earned income after an interim decrease, then the PHA must review the report quarterly after the family's interim decrease.

7-I.F. LEVEL 4 VERIFICATION [Notice PIH 2023-27]

HUD identifies two types of Level 4 verification: written-third party verification from the source and EIV + self-certification. EIV + Self-Certification EIV may be used as written third-party verification and may be used to calculate income if the family agrees with the information in EIV and self-certifies that the amount is accurate and representative of current income. This practice is known as EIV + self-certification. When calculating income using this method, the PHA may use its discretion to determine which method of calculation is reasonable: the last four quarters combined or an average of any number of quarters. The family must be provided with the information from EIV.

printouts, and unemployment monetary benefit notices. Income tax returns with corresponding official tax forms and schedules attached and including third-party receipt of transmission for income tax return filed (i.e., tax preparer's transmittal receipt, summary of transmittal from online source, etc.) are an acceptable form of written, third-party verification. The PHA is required to obtain, at minimum, two current and consecutive pay stubs when calculating income using third-party verification from the source. For new income sources or when two pay stubs are not available, the PHA should determine income based on the information from a traditional written, third-party verification form or the best available information. When the family disputes EIV-reported employment income, the PHA uses written third-party verification. When verification of assets is required, PHAs are required to obtain a minimum of one statement that reflects the current balance of banking/financial accounts. PHA Policy In general, the Authority will use third-party verification from the source in the following circumstances: At annual reexamination when EIV + self-certification is not used; For all new admissions; and For all interim reexaminations. The Authority will not use this method if the Authority is able to use an income determination from a means-tested federal assistance program or if the Authority uses EIV + self-certification as outlined above. In general, third-party documents provided by the family or the source must be dated within 120 days of the date received by the Authority. However, for fixed-income sources, a statement dated within the appropriate benefit year is acceptable documentation. The Authority may reject documentation provided by the family if the document is not an original, if the document appears to be forged, or if the document is altered, mutilated, or illegible. If the Authority determines that third-party documents provided by the family are not acceptable, the Authority will explain the reason to the family and request additional documentation from the family or will use a lower form of verification such as a written third-party verification form. When verification of assets held by a banking or financial institution is required, the Authority will obtain one statement that reflects the current balance of the account. When pay stubs are used, the Authority will require the family to provide the four most current, consecutive pay stubs. At the Authority's discretion, if additional paystubs are needed due to the family's circumstances (e.g., sporadic income, fluctuating schedule, etc.), the Authority may request additional paystubs or a payroll record.

7-I.G. LEVEL 3 VERIFICATION: WRITTEN, THIRD-PARTY FORM

[Notice PIH 2023 -27] This type of verification is a form developed by the PHA and used uniformly for all families when needed to collect information from a third-party source. This is known as "traditional third- party verification." PHAs send a PHA-developed form directly to the third-party source by mail, fax, or email and the source completes the form by hand (in writing or typeset). The PHA may use this method when higher forms are unavailable or are rejected by the PHA or when the family is unable to provide acceptable verification. The PHA may skip this level of verification and may instead substitute oral third-party verification before moving to self- certification.

7.I.H. LEVEL 2: ORAL THIRD-PARTY VERIFICATION [Notice PIH 2023-27] For third-party oral verification, PHAs contact sources, identified by UIV techniques or by the family, by telephone or in person. Third-party oral verification may be used when requests for written third-party verification forms have not been returned within a reasonable time—e.g., 10 business days. PHAs must document in the file the date and time of the telephone call or visit, the name of the person contacted, the telephone number, as well as the information confirmed. The PHA may skip this level of verification if they attempted written third-party verification via a form and the source did not respond and move directly to self-certification.

When Third-Party Verification is Not Required [Notice PIH 2023-27] Third-party verification may not be available in all situations. HUD has acknowledged that it may not be cost-effective or reasonable to obtain third-party verification of income, assets, or expenses when these items would have a minimal impact on the family's total tenant payment.

7-I.I. LEVEL 1: NON-THIRD-PARTY VERIFICATION: SELF-CERTIFICATION

[Notice PIH 2023-27] Non-third-party verification consists of a signed statement of reported income and/or expenses. This verification method should be used as a last resort when the PHA has not been successful in obtaining information via all other required verification techniques. Self-certification, however, is an acceptable form of verification when:

• A source of income is fully excluded
• Net family assets total are less than or equal to the HUD-published threshold amount

($50,000 for 2024 and $51,600 for 2025) and the PHA has adopted a policy to accept self certification

• The family declares that they do not have any present ownership in any real property
• A family reports zero income;
• A family states that they have non-recurring income that will not be repeated in the coming

year; and/or

• The PHA has adopted a policy to implement streamlined verification for fixed sources of

income (See Chapter 11) When the PHA was required to obtain third-party verification but instead relies on self- certification, the family's file must be documented to explain why third-party verification was not available. HUD does not require that a self-certification be notarized; however, HUD recommends including language on any self-certification to ensure the certifier understands the consequences of knowingly providing false information.

The Authority may require a family to certify that a family member does not receive a particular type of income or benefit. The self-certification must be made in a format acceptable to the Authority and must be signed by the family member whose information or status is being verified. All self-certifications will include the following language: "I/We, the undersigned, certify under penalty of perjury that the information provided here is true and correct, to the best of my knowledge and recollection. WARNING: Anyone who knowingly submits a false claim or knowingly makes a false statement is subject to criminal and/or civil penalties, including confinement for up to five years, fines, and civil and administrative penalties (18 U.S.C. 287, 1001, 1010, 1012; 31 U.S.C. 3279, 3802)."

Part Ii: Verifying Family Information

7-II.A. VERIFICATION OF LEGAL IDENTITY

Children Certificate of birth, naturalization papers Certificate of birth Church issued baptismal certificate Adoption papers Current, valid driver's license or Custody agreement Department of Motor Vehicles Health and Human Services ID identification card Certified school records U.S. military discharge (DD 214) Current U.S. passport Current employer identification card with picture Current government employer identification card with picture If a document submitted by a family is illegible for any reason or otherwise questionable, more than one of these documents may be required. If none of these documents can be provided and at the PHA's discretion, a third party who knows the person may attest to the person's identity. The certification must be provided in a format acceptable to the PHA and must be signed by the family member whose information or status is being verified. Legal identity will be verified for all applicants at the time of eligibility determination and in cases where the PHA has reason to doubt the identity of a person representing themselves to be a participant.

7-II.B. SOCIAL SECURITY NUMBERS [24 CFR 5.216, Notice PIH 2023-27]

The family must provide documentation of a valid Social Security number (SSN) for each member of the household, with the exception of individuals who do not contend eligible immigration status. Exemptions also include existing program participants who were at least 62 years of age as of January 31, 2010, and had not previously disclosed an SSN. Note that an individual who previously declared to have eligible immigration status may not change their declaration for the purpose of avoiding compliance with the SSN disclosure and documentation requirements or penalties associated with noncompliance with these requirements. Nor may the head of household opt to remove a household member from the family composition for this purpose.

The PHA must accept the following documentation as acceptable evidence of the social security number:

• An original SSN card issued by the Social Security Administration (SSA)
• An original SSA-issued document, which contains the name and SSN of the individual
• An original document issued by a federal, state, or local government agency, which contains

the name and SSN of the individual While PHAs must attempt to gather third-party verification of SSNs prior to admission as listed above, PHAs also have the option of accepting a self-certification and a third-party document (such as a bank statement, utility or cell phone bill, or benefit letter) with the applicant's name printed on it to satisfy the SSN disclosure requirement if the PHA has exhausted all other attempts to obtain the required documentation. If verifying an individual's SSN using this method, the PHA must document why the other SSN documentation was not available. If the tenant's SSN becomes verified in EIV, then no further verification is required. If the tenant's SSN fails the SSA identity match, then the PHA must obtain a valid SSN card issued by the SSA or an original document issued by a federal or state government agency that contains the name of the individual and the SSN of the individual, along with other identifying information of the individual. The tenant's assistance must be terminated if they fail to provide the required documentation.

If an applicant family includes a child under 6 years of age who joined the household within the 6 months prior to the date of voucher issuance, an otherwise eligible family may be admitted to the program and the family must provide documentation of the child's SSN within 90 days of the effective date of the initial HAP contract. A 90-day extension will be granted if the PHA determines that the participant's failure to comply was due to unforeseen circumstances and was outside of the participant's control.

7-II.C. DOCUMENTATION OF AGE

A birth certificate or other official record of birth is the preferred form of age verification for all family members. For elderly family members an original document that provides evidence of the receipt of social security retirement benefits is acceptable.

7-II.D. FAMILY RELATIONSHIPS

Applicants and program participants are required to identify the relationship of each household member to the head of household. Definitions of the primary household relationships are provided in the Eligibility chapter.

A certified copy of a divorce decree, signed by a court officer, is required to document that a couple is divorced. Absence of Adult Member

7-II.E. VERIFICATION OF STUDENT STATUS

General Requirements

The student has at least one dependent child, as defined in section 3-II.E. The student is a person with disabilities, as defined in section 3-II.E, and was receiving assistance prior to November 30, 2005. If the Authority cannot verify at least one of these exemption criteria, the Authority will conclude that the student is subject to the restrictions on assistance at 24 CFR 5.612. In addition to verifying the student's income eligibility, the Authority will then proceed to verify either the student's parents' income eligibility (see section 7-III.M) or the student's independence from their parents (see below). Independent Student

7-II.F. DOCUMENTATION OF DISABILITY

The PHA must verify the existence of a disability in order to allow certain income disallowances and deductions from income. The PHA is not permitted to inquire about the nature or extent of a person's disability [24 CFR 100.202(c)]. The PHA may not inquire about a person's diagnosis or details of treatment for a disability or medical condition. If the PHA receives a verification document that provides such information, the PHA will not place this information in the tenant file. Under no circumstances will the PHA request a participant's medical record(s). For more information on health care privacy laws, see the Department of Health and Human Services' website at http://www.hhs.gov/ocr/privacy/. The above cited regulation does not prohibit the following inquiries, provided these inquiries are made of all applicants, whether or not they are persons with disabilities [VG, p. 24]: Inquiry into an applicant's ability to meet the requirements of ownership or tenancy Inquiry to determine whether an applicant is qualified for a dwelling available only to persons with disabilities or to persons with a particular type of disability

Inquiry to determine whether an applicant for a dwelling is qualified for a priority available to persons with disabilities or to persons with a particular type of disability Inquiring whether an applicant for a dwelling is a current illegal abuser or addict of a controlled substance Inquiring whether an applicant has been convicted of the illegal manufacture or distribution of a controlled substance Family Members Receiving SSA Disability Benefits sufficient verification of disability for the purpose of qualifying for waiting list preferences (if applicable) or certain income disallowances and deductions [VG, p. 23].

7-II.G. CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS [24 CFR 5.508]

Overview Housing assistance is not available to persons who are not citizens, nationals, or eligible immigrants. Prorated assistance is provided for "mixed families" containing both eligible and ineligible persons. A detailed discussion of eligibility requirements is in the Eligibility chapter. This verifications chapter discusses HUD and PHA verification requirements related to citizenship status. The family must provide a certification that identifies each family member as a U.S. citizen, a U.S. national, an eligible noncitizen or an ineligible noncitizen and submit the documents discussed below for each family member. Once eligibility to receive assistance has been verified for an individual it need not be collected or verified again during continuously-assisted occupancy. [24 CFR 5.508(g)(5)] U.S. Citizens and Nationals HUD requires a declaration for each family member who claims to be a U.S. citizen or national. The declaration must be signed personally by any family member 18 or older and by a guardian for minors. The PHA may request verification of the declaration by requiring presentation of a birth certificate, United States passport or other appropriate documentation.

7-II.H. VERIFICATION OF PREFERENCE STATUS

The PHA must verify all preferences claimed by an applicant that determined placement on the waiting list.

PART III: VERIFYING INCOME AND ASSETS

Chapter 6 of this plan describes in detail the types of income that are included and excluded and how assets and income from assets are handled. Any income reported by the family must be verified. This part provides PHA policies that supplement the general verification procedures specified in Part I of this chapter.

7-III.A. EARNED INCOME

Tips

7-III.B. BUSINESS AND SELF EMPLOYMENT INCOME

The PHA must obtain written, third-party verification when the income type is not available in EIV. This includes income from self-employment.

The business owner/self-employed person will be required to submit the information requested and to certify to its accuracy at all future reexaminations declaring their income and expenses. At any reexamination the Authority may request documents that support submitted financial statements such as manifests, appointment books, cash books, or bank statements. If a family member has been self-employed less than three (3) months, the Authority will accept the family member's certified estimate of income and schedule an interim reexamination in three (3) months. If the family member has been self-employed for three (3) to twelve (12) months the Authority will require the family to provide documentation of income and expenses for this period and use that information to project income.

7-III.C. PERIODIC PAYMENTS AND PAYMENTS IN LIEU OF EARNINGS

For policies governing streamlined income determinations for fixed sources of income, please see Chapter 11. Social Security/SSI Benefits [Notice PIH 2023-27] benefits differ for applicants and participants. For applicants, since EIV does not contain SS or SSI benefit information, the PHA must ask applicants to provide a copy of their current SS and/or SSI benefit letter (dated within the last appropriate benefit year) for each family member that receives SS and/or SSI benefits. If the family is unable to provide the document or documents, the PHA should help the applicant request a benefit verification letter from SSA's website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. The PHA must obtain the original benefit letter from the applicant, make a photocopy of the document for the file, and return the original to the family. For participants, the PHA must obtain information through the HUD EIV system and confirm with the participants that the current listed benefit amount is correct.

• If the participant agrees with the amount reported in EIV, the PHA must use the EIV-

reported gross benefit amount to calculate annual income from Social Security. PHAs are required to use the EIV-reported SS and SSI benefit amounts when calculating income unless the tenant disputes the EIV-reported amount. For example, an SSA benefit letter may list the monthly benefit amount as $450.80 and EIV displays the amount as $450.00. The PHA must use the EIV-reported amount unless the participant disputes the amount.

• If the participant disputes the EIV-reported benefit amount, or if benefit information is not

available in EIV, the PHA must request a current SSA benefit verification letter (dated within the last appropriate benefit year) from each family member that receives SS and/or SSI benefits. If the family is unable to provide the document or documents, the PHA should help the participant request a benefit verification letter from SSA's website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. The PHA must obtain the original benefit letter from the participant, make a photocopy of the document for the file, and return the original to the family. Photocopies of social security checks or bank statements are not acceptable forms of verification for SS/SSI benefits.

7-III.D. ALIMONY OR CHILD SUPPORT [Notice PIH 2023-27]

Annual income includes "all amounts received," not the amount that a family may be legally entitled to receive but which they do not receive. For example, a family's child support or alimony income must be based on payments received, not the amounts to which the family is entitled by court or agency orders. A copy of a court order or other written payment agreement alone may not be sufficient verification of amounts received by a family.

7-III.E. NONRECURRING INCOME [Notice PIH 2023-27]

Income that will not be repeated beyond the coming year (i.e., the 12 months following the effective date of the certification), based on information provided by the family, is considered nonrecurring income and is excluded from annual income. PHAs may accept a self-certification from the family stating that the income will not be repeated in the coming year.

7-III.F. ASSETS AND INCOME FROM ASSETS

Net Family Assets [24 CFR 5.603] At admission and reexam, for families with net assets totaling less than or equal to the HUD- published threshold listed in the HUD's current year Inflation-Adjusted Values table ($50,000 for 2024 and $51,600 for 2025), the PHA may, but is not required to, accept the family's self- certification that the family's assets do not exceed the HUD-published threshold without taking any additional steps to verify the accuracy of the declaration. The declaration must include the amount of income the family expects to receive from assets which must be included in the family's income. This includes declaring income from checking and savings accounts which, although excluded from the calculation of net family assets (because the combined value of non- necessary personal property does not exceed the HUD-published threshold), may generate asset income. PHAs must clarify during the self-certification process which assets are included/excluded from net family assets. For PHAs that choose to accept self-certification, the PHA is required to obtain third-party verification of all assets, regardless of the amount, at least once every three years. PHAs who choose not to accept self-certifications of assets must verify all families' assets on an annual basis. When net family assets have a total value over the HUD-published threshold, the PHA may not rely on the family's self-certification. Third-party verification of assets is required when net family assets exceed the HUD-published threshold. When verification of assets is required, PHAs are required to obtain a minimum of one statement that reflects the current balance of banking/financial accounts.

Self-Certification of Real Property Ownership [24 CFR 5.618(b)(2); Notice PIH 2023-27] The PHA must determine whether a family has present ownership in real property that is suitable for occupancy for purposes of determining whether the family is compliant with the asset limitation described in Chapters 3. The PHA may accept a self-certification from the family stating that the family does not have any present ownership in any real property. If the family certifies that they do not have any present ownership interest in real property, the PHA may take that as sufficient to determine the family is not out of compliance with the real property restriction. If the family declares they have present ownership in real property, the PHA must obtain third-party verification of the family's legal right to reside in the property, the effective legal authority to sell the property, and whether the property is suitable for occupancy by the family as a residence.

7-III.G. NET INCOME FROM RENTAL PROPERTY

7-III.H. FEDERAL TAX REFUNDS OR REFUNDABLE TAX CREDITS

[Notice PIH 2023-27] PHAs are not required to verify the amount of the family's federal tax refund or refundable tax credit(s) if the family's net assets are less than or equal to the HUD-published threshold listed in HUD's current Inflation-Adjusted Values tables ($50,000 for 2024 and $51,600 for 2025), even in years when full verification of assets is required or if the PHA does not accept self- certification of assets. PHAs must verify the amount of the family's federal tax refund or refundable tax credits if the family's net assets are greater than the HUD-published threshold.

7-III.I. RETIREMENT ACCOUNTS

7-III.J. INCOME FROM EXCLUDED SOURCES [Notice PIH 2023-27]

A detailed discussion of excluded income is provided in Chapter 6, Part I. HUD guidance on verification of excluded income draws a distinction between income which is fully excluded and income which is only partially excluded. For fully excluded income, the PHA is not required to follow the verification hierarchy, For fully excluded income, the PHA is not required to document why third-party verification is not available, or report the income on the 50058. Fully excluded income is defined as income where the entire amount qualifies to be excluded from the annual income determination in accordance with 24 CFR 5.609(b) and any Federal Register notice on mandatory exclusions issued by HUD (for example, food stamps, earned income of a minor, or foster care funds). PHAs may accept a family's signed application or reexamination form as self-certification of fully excluded income. They do not have to require additional documentation. However, if there is any doubt that a source of income qualifies for full exclusion, PHAs have the option of requiring additional verification. For partially excluded income, the PHA is required to follow the verification hierarchy and all applicable regulations, and to report the income on the 50058. Partially excluded income is defined as income where only a certain portion of what is reported by the family qualifies to be excluded and the remainder is included in annual income (for example, the income of an adult full-time student).

7-III.K. ZERO INCOME FAMILIES [Notice PIH 2023-27]

PHAs have discretion to establish reasonable procedures to manage the risk of unreported income, such as asking families to complete a zero-income worksheet at admission or periodically after admission to determine if they have any sources of unreported income or searching any UIV sources for unreported income. In calculating annual income, PHAs must not assign monetary value to nonmonetary in-kind donations from a food bank or similar organization received by the family [24 CFR § 5.609(b)(24)(vi)]. PHAs may accept a self-certification of zero income from the family without taking any additional steps to verify zero reported income. HUD does not require such self-certifications be notarized. PHAs that perform zero income reviews must update local discretionary policies, procedures, and forms. Families who begin receiving income which does not trigger an interim reexamination should no longer be considered zero income even though the family's income is not reflected on the Form HUD-50058.

7-III.L. STUDENT FINANCIAL ASSISTANCE [24 CFR 5.609(b)(9)]

The regulations under HOTMA distinguish between two categories of student financial assistance paid to both full-time and part-time students. Any other grant-in-aid, scholarship, or other assistance amounts an individual receives for the actual covered costs charged by the institute of higher education not otherwise excluded by the federally mandated income exclusions are included [24 CFR 5.609(b)(9)(ii)].

If the Authority is unable to obtain third-party written verification of the requested information, the Authority will pursue other forms of verification following the verification hierarchy in section 7-I.B.

7-III.M. PARENTAL INCOME OF STUDENTS SUBJECT TO ELIGIBILITY

RESTRICTIONS If a student enrolled at an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the income of the student's parents must be considered when determining income eligibility, unless the student is determined independent from their parents or a vulnerable youth in accordance with PHA policy [24 CFR 5.612, FR Notice 4/10/06, p. 18146, and FR Notice 9/21/16]. This provision does not apply to students residing with parents who are seeking or receiving HCV assistance. It is limited to students who are seeking or receiving assistance on their own, separately from their parents.

Part Iv: Verifying Mandatory Deductions

7-IV.A. DEPENDENT AND ELDERLY/DISABLED HOUSEHOLD DEDUCTIONS

The dependent and elderly/disabled family deductions require only that the PHA verify that the family members identified as dependents or elderly/disabled persons meet the statutory definitions. No further verifications are required. Dependent Deduction See Chapter 6 for a full discussion of this deduction. The PHA must verify that:

• Any person under the age of 18 for whom the dependent deduction is claimed is not the head,

spouse, or cohead of the family and is not a foster child

• Any person age 18 or older for whom the dependent deduction is claimed is not a foster adult

or live-in aide, and is a person with a disability or a full time student Elderly/Disabled Family Deduction See Eligibility chapter for a definition of elderly and disabled families and Chapter 6 for a discussion of the deduction. The PHA must verify that the head, spouse, or cohead is 62 years of age or older or a person with disabilities.

7-IV.B. HEALTH AND MEDICAL CARE EXPENSE DEDUCTION

Policies related to medical expenses are found in Chapter 6. The amount of the deduction will be verified following the standard verification procedures described in Part I. The PHA must comply with the Health Insurance Portability and Accountability Act (HIPAA) (Pub. L. 104-191, 110 Stat. 1936) and the Privacy Act of 1974 (Pub. L. 93-579, 88 Stat. 1896) when requesting documentation to determine unreimbursed health and medical care expenses. The PHA may not request documentation beyond what is sufficient to determine anticipated health and medical care costs. Before placing bills and documentation in the tenant file, the PHA must redact all personally identifiable information [FR Notice 2/14/23]. Amount of Expense

information regarding the nature or severity of the person's disability, the Authority will immediately dispose of this confidential information; this information will never be maintained in the individual's file. If the information needs to be disposed of, the Authority will note in the individual's file that verification was received, the date received, and the name and address of the person/organization that provided the verification. Under no circumstances will Authority include an applicant's or resident's medical records in the file [Notice PIH 2010-26]. In addition, the PHA must verify that:

• The household is eligible for the deduction.
• The costs to be deducted are qualified health and medical care expenses.
• The expenses are not paid for or reimbursed by any other source.
• Costs incurred in past years are counted only once.

Eligible Household The health and medical care expense deduction is permitted only for households in which the head, spouse, or cohead is at least 62, or a person with disabilities. The PHA must verify that the family meets the definition of an elderly or disabled family provided in the Eligibility chapter and as described in Chapter 7 (7-IV.A.) of this plan. Qualified Expenses To be eligible for the health and medical care expense deduction, the costs must qualify as medical expenses. See Chapter 6 for the PHA's policy on what counts as a medical expense. Unreimbursed Expenses To be eligible for the health and medical care expense deduction, the costs must not be reimbursed by another source.

7-IV.C. DISABILITY ASSISTANCE EXPENSES

Policies related to disability assistance expenses are found in 6-II.E. The amount of the deduction will be verified following the standard verification procedures described in Part I. The PHA must comply with the Health Insurance Portability and Accountability Act (HIPAA) (Pub. L. 104-191, 110 Stat. 1936) and the Privacy Act of 1974 (Pub. L. 93-579, 88 Stat. 1896) when requesting documentation to determine unreimbursed auxiliary apparatus or attendance care costs. The PHA may not request documentation beyond what is sufficient to determine anticipated reasonable attendant care and auxiliary apparatus costs. Before placing bills and documentation in the tenant file, the PHA must redact all personally identifiable information [FR Notice 2/14/23]. Amount of Expense Attendant Care

If third-party verification is not possible, written family certification of estimated apparatus costs for the upcoming 12 months. Costs incurred and applied in past years are counted only once In addition, the Authority must verify that:

• The family member for whom the expense is incurred is a person with disabilities (as

described in 7-II.F above).

• The expense permits a family member, or members, to work (as described in Chapter 6.).
• The expense is not reimbursed from another source (as described in Chapter 6.).

Family Member is a Person with Disabilities To be eligible for the disability assistance expense deduction, the costs must be incurred for attendant care or auxiliary apparatus expense associated with a person with disabilities. The PHA will verify that the expense is incurred for a person with disabilities (See 7-II.F.). Family Member(s) Permitted to Work The PHA must verify that the expenses claimed actually enable a family member, or members, (including the person with disabilities) to work.

7-IV.D. CHILDCARE EXPENSES

Policies related to childcare expenses are found in Chapter 6. The amount of the deduction will be verified following the standard verification procedures described in Part I of this chapter. In addition, the PHA must verify that:

• The child is eligible for care (12 or younger).
• The costs claimed are not reimbursed.
• The costs enable a family member to work, actively seek work, or further their education.
• The costs are for an allowable type of childcare.
• The costs are reasonable.

Eligible Child To be eligible for the childcare deduction, the costs must be incurred for the care of a child under the age of 13. The PHA will verify that the child being cared for (including foster children) is under the age of 13 (See 7-II.C.). Unreimbursed Expense To be eligible for the childcare deduction, the costs must not be reimbursed by another source.

timing of classes for which the person is registered. The documentation may be provided by the family. Gainful Employment The Authority will seek third-party verification of the work schedule of the person who is permitted to work by the childcare. In cases in which two or more family members could be permitted to work, the work schedules for all relevant family members may be verified. The documentation may be provided by the family. Allowable Type of Childcare The type of care to be provided is determined by the family, but must fall within certain guidelines, as discussed in Chapter 6.

EXHIBIT 7-1: SUMMARY OF DOCUMENTATION REQUIREMENTS FOR NONCITIZENS [HCV GB, pp. 5-9 and 5-10]

• All noncitizens claiming eligible status must sign a declaration of eligible immigrant status

on a form acceptable to the PHA.

• Except for persons 62 or older, all noncitizens must sign a verification consent form
• Additional documents are required based upon the person's status.

Elderly Noncitizens

• A person 62 years of age or older who claims eligible immigration status also must provide

proof of age such as birth certificate, passport, or documents showing receipt of SS old-age benefits. All other Noncitizens

• Noncitizens that claim eligible immigration status also must present the applicable USCIS

document. Acceptable USCIS documents are listed below.

• Form I-551 Alien Registration Receipt • Form I-94 Arrival-Departure Record with

Card (for permanent resident aliens) no annotation accompanied by:

• Form I-94 Arrival-Departure Record • A final court decision granting asylum

annotated with one of the following: (but only if no appeal is taken);

• "Admitted as a Refugee Pursuant to • A letter from a USCIS asylum officer

Section 207" granting asylum (if application is filed on or after 10/1/90) or from a USCIS

• "Section 208" or "Asylum"

district director granting asylum

• "Section 243(h)" or "Deportation (application filed before 10/1/90);

stayed by Attorney General"

• A court decision granting withholding
• "Paroled Pursuant to Section 221 (d)(5) of deportation; or

of the USCIS"

• A letter from an asylum officer granting

withholding or deportation (if application filed on or after 10/1/90).

• Form I-688 Temporary Resident Card Form I-688B Employment Authorization Card

annotated "Section 245A" or Section 210". annotated "Provision of Law 274a. 12(11)" or "Provision of Law 274a.12".

• A receipt issued by the USCIS indicating that an application for issuance of a replacement

document in one of the above listed categories has been made and the applicant's entitlement to the document has been verified; or

• Other acceptable evidence. If other documents are determined by the USCIS to constitute

acceptable evidence of eligible immigration status, they will be announced by notice published in the Federal Register

NATIONAL STANDARDS FOR THE PHYSICAL INSPECTION OF REAL ESTATE

AND RENT REASONABLENESS DETERMINATIONS [24 CFR 5 Subpart G and Notice PIH 2023-28]

Introduction

This chapter is applicable prior to the Authority's NSPIRE compliance date. After this date, the Authority will follow policies as outlined in Chapter 8.B. and Project Based Voucher (PBV) assistance in accordance with housing quality standards. Units assisted under the program must comply with HUD's National Standards for the Physical Inspection of Real Estate (NSPIRE) regulations and standards no later than October 1, 2025. Until such time, the PHA may continue using the HQS inspection standards. All units must pass an HQS inspection prior to the approval of a lease and at least once every 24 months during the term of the HAP contract, and at other times as needed, to determine that the unit meets HQS. HUD also requires PHAs to determine that rents for units under the program are reasonable when compared to comparable unassisted units in the market area.

This chapter explains HUD and PHA requirements related to physical inspections and rent reasonableness as follows: Part I. Physical Standards. This part discusses physical standards required of units occupied by HCV and PBV-assisted families and identifies decisions about the acceptability of the unit that may be made by the family based upon the family's preference. It also identifies life-threatening conditions that must be addressed on an expedited basis. Part II. The Inspection Process. This part describes the types of inspections the PHA will make and the steps that will be taken when units do not meet HQS. Part III. Rent Reasonableness Determinations. This part discusses the policies the PHA will use to make rent reasonableness determinations. Special HQS requirements for homeownership, manufactured homes, and other special housing types are discussed in Chapter 15 to the extent that they apply in this jurisdiction. NSPIRE and HQS Even once the HQS inspection standard has sunset, the regulations at 24 CFR Part 982 and 983 governing the HCV and PBV programs will continue to use the terms HQS and housing quality standards rather than NSPIRE. This is because the definition of housing quality standards (HQS) at 24 CFR 982.4 means the minimum quality standards developed by HUD in accordance with 24 CFR 5.703 for the HCV program, including any variations approved by HUD for the PHA. As such, the model policy uses the term housing quality standards whenever applicable regulations use this term. Except in the chapter describing HQS, the acronym HQS is not used in Housing Quality Standards & Rent Reasonableness Determination

the model policy in order to avoid confusion between the umbrella term meaning housing standards and the specific inspection protocol. The model policy only uses the term NSPIRE when referring to specific NSPIRE standards.

Housing Quality Standards & Rent Reasonableness Determination

Part I: Physical Standards

8-I.A. GENERAL HUD REQUIREMENTS

HUD Performance and Acceptability Standards HUD's performance and acceptability standards for HCV-assisted housing are provided in 24 CFR 982.401. These standards cover the following areas:

• Sanitary facilities
• Food preparation and refuse disposal
• Space and security
• Thermal environment
• Illumination and electricity
• Structure and materials
• Interior air quality
• Water supply
• Lead-based paint
• Access
• Site and neighborhood
• Sanitary condition
• Smoke detectors

A summary of HUD performance criteria is provided in Exhibit 8-1. Additional guidance on these requirements is found in the following HUD resources:

• Housing Choice Voucher Guidebook, Chapter 10.
• HUD Housing Inspection Manual for Section 8 Housing
• HUD Inspection Form, form HUD-52580 (3/01) and Inspection Checklist, form

HUD-52580-A (9/00)

• HUD Notice 2003-31, Accessibility Notice: Section 504 of the Rehabilitation Act of 1973;

the Americans with Disabilities Act of 1990; the Architectural Barriers Act of 1968 and the

Housing Quality Standards & Rent Reasonableness Determination

NSPIRE Standards Applicable to HQS [HUD Letter 6/14/24] Even if the PHA is still under the HQS inspection standard, the PHA must apply the following requirements under NSPIRE:

• The NSPIRE standards for carbon monoxide alarms are currently applicable even if the PHA

has not yet transitioned to NSPIRE;

• PHAs are required to comply with the NSPIRE Smoke Alarm Standard prior to December 3,

2024; and

• The Visual Assessment Standard for Potential Lead-Based Paint Hazard in 24 CFR Part 35

Subparts M and H apply. Tenant Preference Items HUD requires the PHA to enforce minimum HQS but also recognizes that certain judgments about the acceptability of the unit are left to the family. For example, the PHA must ensure that the unit contains the required sanitary facilities, but the family decides whether the cosmetic appearance of the facilities is acceptable. Exhibit 8-2 summarizes those items that are considered tenant preferences. Modifications to Provide Accessibility Under the Fair Housing Act of 1988 an owner must not refuse the request of a family that contains a person with a disability to make necessary and reasonable modifications to the unit. Such modifications are at the family's expense. The owner may require restoration of the unit to its original condition if the modification would interfere with the owner or next occupant's full enjoyment of the premises. The owner may not increase a customarily required security deposit. However, the landlord may negotiate a restoration agreement that requires the family to restore the unit and, if necessary to ensure the likelihood of restoration, may require the tenant to pay a reasonable amount into an interest- bearing escrow account over a reasonable period of time. The interest in any such account accrues to the benefit of the tenant. The owner may also require reasonable assurances that the quality of the work will be acceptable and that any required building permits will be obtained. [24 CFR 100.203; Notice 2003-31]. Modifications to units to provide access for a person with a disability must meet all applicable HQS requirements and conform to the design, construction, or alteration of facilities contained in the UFAS and the ADA Accessibility Guidelines (ADAAG) [28 CFR 35.151(c) and Notice 2003-31] See Chapter 2 of this plan for additional information on reasonable accommodations for persons with disabilities.

8-I.B. ADDITIONAL LOCAL REQUIREMENTS

The PHA may impose variations to the HQS as long as the additional criteria are not likely to adversely affect the health or safety of participant families or severely restrict housing choices Housing Quality Standards & Rent Reasonableness Determination

for families. HUD approval is required for variations to HQS. HUD approval is not required if the variations are clarifications of HUD's acceptability criteria or performance standards [24 CFR 982.401(a)(4)]. Thermal Environment [HCV GB p.10-7] The PHA must define a "healthy living environment" for the local climate. This may be done by establishing a temperature that the heating system must be capable of maintaining, that is appropriate for the local climate.

Clarifications of HUD Requirements

Sinks All sinks and commode water lines must have shut off valves, unless faucets are wall mounted. All sinks must have functioning stoppers. Toilets All worn or cracked toilet seats and tank lids must be replaced and toilet tank lid must fit properly. Security If window security bars or security screens are present on emergency exit windows, they must be equipped with a quick release system. The owner is responsible for ensuring that the family is instructed on the use of the quick release system.

Housing Quality Standards & Rent Reasonableness Determination

8-I.C. LIFE-THREATENING CONDITIONS [24 CFR 982.404(a); FR Notice 1/18/17]

HUD requires the PHA to define life-threatening conditions and to notify the owner or the family (whichever is responsible) of the corrections required. The responsible party must correct life- threatening conditions within 24 hours of PHA notification.

Housing Quality Standards & Rent Reasonableness Determination

Water leaking or ponding near any electrical device Any condition that poses a serious risk of electrocution or fire and poses an immediate life-threatening condition Absence of a working heating system when outside temperature is below 60 degrees Fahrenheit. Utilities not in service, including no running hot water Conditions that present the imminent possibility of injury Obstacles that prevent safe entrance or exit from the unit Any components that affect the function of the fire escape are missing or damaged Stored items or other barriers restrict or prevent the use of the fire escape in the event of an emergency The building's emergency exit is blocked or impeded, thus limiting the ability of occupants to exit in a fire or other emergency Absence of a functioning toilet in the unit Inoperable or missing smoke detectors Missing or inoperable carbon monoxide detector Missing, damaged, discharged, overcharged, or expired fire extinguisher (where required) Gas/oil-fired water heater or heating, ventilation, or cooling system with missing, damaged, improper, or misaligned chimney venting The chimney or venting system on a fuel-fired water heater is misaligned, negatively pitched, or damaged, which may cause improper or dangerous venting or gases A gas dryer vent is missing, damaged, or is visually determined to be inoperable, or the dryer exhaust is not vented to the outside A fuel-fired space heater is not properly vented or lacks available combustion air A non-vented space heater is present Safety devices on a fuel-fired space heater are missing or damaged The chimney or venting system on a fuel-fired heating, ventilation, or cooling system is misaligned, negatively pitched, or damaged, which may cause improper or dangerous venting of gas

Housing Quality Standards & Rent Reasonableness Determination

Deteriorating paint as defined at 24 CFR 35.110 in a unit built before 1978 that is to be occupied by a family with a child under six years of age if it would prevent the family from moving into the unit If an owner fails to correct life-threatening conditions as required by the PHA, the PHA will enforce the HQS in accordance with HUD requirements. See 8-II-G. If a family fails to correct a family-caused life-threatening condition as required by the PHA, the PHA will enforce the family obligations. See 8-II.H.

The owner will be required to repair an inoperable smoke detector unless the PHA determines that the family has intentionally disconnected it (by removing batteries or other means). In this case, the family will be required to repair the smoke detector within 24 hours.

8-I.D. OWNER AND FAMILY RESPONSIBILITIES [24 CFR 982.404]

Family Responsibilities The family is responsible for correcting the following HQS deficiencies:

• Tenant-paid utilities not in service
• Failure to provide or maintain appliances owned by the family
• Damage to the unit or premises caused by a household member or guest beyond ordinary

wear and tear that results in a breach of the HQS. "Ordinary wear and tear" is defined as items which could not be charged against the tenant's security deposit under state law or court practice. Owner Responsibilities The owner is responsible for all HQS violations not listed as a family responsibility above, even if the violation is caused by the family's living habits (e.g., vermin infestation). However, if the family's actions constitute a serious or repeated lease violation, the owner may take legal action to evict the family.

The following is applicable to HAP contracts executed or renewed June 6, 2024, or later: Housing Quality Standards & Rent Reasonableness Determination

Owner Obligation The owner must maintain the unit in accordance with housing quality standards. A unit is not in compliance with housing quality standards if the PHA or other inspector authorized by the state or local government determines that the unit has housing quality standards deficiencies based upon an inspection, notifies the owner in writing of the deficiencies, and the deficiencies are not remedied within the appropriate time frame. In the case of a housing quality standards deficiency that the PHA determines is caused by the tenant, any member of the household, or any guest or other person under the tenant's control (other than damage resulting from ordinary use), the PHA may waive the owner's responsibility to remedy the violation. The HAP to the owner may not be withheld or abated if the owner responsibility has been waived. However, if the family's actions constitute a serious or repeated lease violation, the owner may take legal action to evict the family. In addition, the PHA may terminate the family's assistance because of a housing quality standards breach (beyond damage resulting from ordinary use) caused by any member of the household, guest, or other person under the tenant's control.

• Tenant-paid utilities not in service;
• Failure to provide or maintain appliances owned by the family; and
• Damage to the dwelling unit or premises caused by a household member or guest beyond

ordinary wear and tear.

Housing Quality Standards & Rent Reasonableness Determination

If the PHA has waived the owner's responsibility to remedy the violation as outlined under the owner obligations above, the following applies:

• If the housing quality standards breach caused by the family is life-threatening, the family

must take all steps permissible under the lease and state and local law to ensure the deficiency is corrected within 24 hours of notification.

• For other family-caused deficiencies, the family must take all steps permissible under the

lease and state and local law to ensure the deficiency is corrected within 30 calendar days of notification (or any PHA-approved extension). If the family has caused a breach of the HQS, the PHA must take prompt and vigorous action to enforce the family obligations. The PHA may terminate assistance for the family in accordance with 24 CFR 982.552.

8-I.E. SPECIAL REQUIREMENTS FOR CHILDREN WITH ELEVATED BLOOD

LEAD LEVEL [24 CFR 35.1225; FR Notice 1/13/17; Notice PIH 2017-13] If a PHA is notified by a public health department or other medical health care provider, or verifies information from a source other than a public health department or medical health care provider, that a child of less than six years of age, living in an HCV-assisted unit has been identified as having an elevated blood lead level, the PHA must complete an environmental investigation of the dwelling unit within 15 calendar days after being notified by a public health department or other medical health care provider. The environmental investigation must be completed in accordance with program requirements, and the result of the environmental investigation must be immediately provided to the owner of the dwelling unit. In cases where the public health department has already completed an evaluation of the unit, this information must be provided to the owner. Within 30 days after receiving the environmental investigation report from the PHA, or the evaluation from the public health department, the owner is required to complete the reduction of identified lead-based paint hazards in accordance with the lead-based paint regulations [24 CFR 35.1325 and 35.1330; 40 CFR 745.227]. If the owner does not complete the "hazard reduction" as required, the dwelling unit is in violation of HQS and the PHA will take action in accordance with Section 8-II.G. PHA reporting requirements, and data collection and record keeping responsibilities related to children with an elevated blood lead level are discussed in Chapter 16.

Housing Quality Standards & Rent Reasonableness Determination

8-I.F. VIOLATION OF HQS SPACE STANDARDS [24 CFR 982.401, 24 CFR 982.403]

A dwelling unit must:

• Provide adequate space and security for the family
• Have at least one bedroom or living/sleeping room for each two persons

A unit that does not meet these HQS space standards is defined as overcrowded. A living room may be used as sleeping (bedroom) space, but no more than two persons may occupy the space [HCV GB p. 10-6]. A bedroom or living/sleeping room must have at least:

• One window

Two electrical outlets in proper operating condition (permanent overhead or wall-mounted light fixtures may count as one of the required electrical outlets) A unit that does not meet these space standards is defined as overcrowded. If the PHA determines that a unit is overcrowded because of an increase in family size or a change in family composition, the PHA must issue the family a new voucher, and the family must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the PHA must terminate the HAP contract in accordance with its terms.

Part Ii: The Inspection Process

8-II.A. OVERVIEW [24 CFR 982.405]

Types of Inspections The PHA conducts the following types of inspections as needed. Each type of inspection is discussed in the paragraphs that follow.

• Initial Inspections. The PHA conducts initial inspections in response to a request from the

family to approve a unit for participation in the HCV program.

• Periodic (Annual/Biennial) Inspections. HUD requires the PHA to inspect each unit under

lease at least annually or biennially, depending on PHA policy, to confirm that the unit still meets HQS. The inspection may be conducted in conjunction with the family's annual reexamination but also may be conducted separately.

• Interim (Special) Inspections. A special inspection may be requested by the owner, the

family, or a third party as a result of problems identified with a unit between annual inspections.

• Supervisory Quality Control Inspections. HUD requires that a sample of units be inspected

by a supervisor or other qualified individual to evaluate the work of the inspector(s) and to ensure that inspections are performed in compliance with the HQS. Inspection of PHA-Owned Units [24 CFR 982.352(b)] The PHA must obtain the services of an independent entity to perform all HQS inspections in cases where an HCV family is receiving assistance in a PHA-owned unit as defined in 24 CFR Housing Quality Standards & Rent Reasonableness Determination

982.4. The independent entity must communicate the results of each inspection to the family and the PHA. The independent agency must be approved by HUD and may be the unit of general local government for the PHA jurisdiction (unless the PHA is itself the unit of general local government or an agency of such government). For information on the inspection of PHA-owned units in the PBV program, see Chapters 17 and 18. Inspection Costs [Notice PIH 2016-05; 24 CFR 5.705(h)] The PHA may not charge the family for unit inspections or reinspections [24 CFR 982.405(g)]. In the case of inspections of PHA-owned units, the PHA may compensate the independent agency from ongoing administrative fees (including fees credited to the administrative fee reserve) for inspections performed. The PHA and the independent agency may not charge the family any fee or charge for the inspection [24 CFR.982.352(b)]. 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. However, the PHA may charge a reasonable fee to owners for reinspections 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 24 CFR 982.404(a), was not corrected. Fees may not be imposed for tenant-caused damages, for cases in which the inspector could not gain access to the unit, or for new deficiencies discovered during a reinspection. The owner may not pass the cost of a reinspection fee to the family. Reinspection fees must be added to the PHA's administrative fee reserves and may only be used for activities related to the provision of tenant-based assistance.

Both the family and the owner will be given reasonable notice of all inspections. Except in the case of a life-threatening emergency, reasonable notice is considered to be not less than 24 hours. Inspections may be scheduled between 8:00 a.m. and 7:00 p.m. Generally, inspections will be conducted on business days only. In the case of a life-threatening emergency, the Authority will give as much notice as possible, given the nature of the emergency. Owner and Family Inspection Attendance HUD permits the PHA to set policy regarding family and owner presence at the time of inspection [HCV GB p. 10-27].

8-II.B. INITIAL HQS INSPECTION [24 CFR 982.405(a)]

HUD regulations require that units assisted under the HCV program be inspected to determine that the units meet housing quality standards before the PHA approves assisted tenancy. However, PHAs have two options for bringing units under HAP contract (or, in the case of PBV, approving occupancy and the execution of a lease) more quickly. The PHA may, but is not required to approve assisted tenancy and start HAP if the unit:

• Fails the initial inspection, but only if no life-threatening deficiencies are identified.
• Passed an alternative inspection in the last 24 months.

Otherwise, if neither of the above provisions are adopted, the PHA must determine that the unit the family selects meets NSPIRE standards prior to approving tenancy. Approving Units with Non-Life-Threatening Deficiencies [FR Notice 1/18/17; Notice PIH 2017-20; FR Notice 5/7/24; and 24 CFR 982.405(j)] The PHA may approve assisted tenancy, execute a HAP contract, and begin paying HAP if a unit fails an initial inspection, but only if the deficiencies identified are non-life threatening. This is known as the "NLT option." A PHA that implements the NLT option may apply the option to all of the PHA's initial inspections or may limit it to certain units. If the NLT option is adopted, the PHA must follow requirements listed at 24 CFR 982.405(j) for family and owner notification. The PHA's administrative plan must specify the circumstances under which the PHA will exercise the NLT option, if any.

Housing Quality Standards & Rent Reasonableness Determination

Approving Units Using Alternative Inspections [FR Notice 1/18/17; Notice PIH 2017-20; FR Notice 5/7/24; and 24 CFR 982.406] The PHA may approve assisted tenancy, execute a HAP contract, and begin paying HAP if a unit passed an alternative inspection (i.e., an inspection conducted for another housing program) conducted in the last 24 months provided the PHA is able to obtain the results of the alternative inspection, the property received a "pass" score (if applicable), and the inspection meets the requirements at 24 CFR 982.406(c) and (d). The PHA may implement the use of alternative inspections for both initial and periodic inspections or may limit the use of alternative inspections to either initial or periodic inspections. If alternative inspections are used, the PHA must follow requirements listed at 24 CFR 982.406(e)(2) for family and owner notification. A PHA relying on an alternative inspections must identify the alternative inspection method being used in the PHA's administrative plan.

Housing Quality Standards & Rent Reasonableness Determination

If the time period for correcting the deficiencies (or any Authority -approved extension) has elapsed, or the unit fails at the time of the reinspection, the Authority will notify the owner and the family that the unit has been rejected and that the family must search for another unit. The Authority may agree to conduct a second reinspection, for good cause, at the request of the family and owner. Following a failed reinspection, the family may submit a new Request for Tenancy Approval for the same unit after the owner has made repairs, if they are unable to locate another suitable unit. Utilities Generally, at initial lease-up the owner is responsible for demonstrating that all utilities are in working order including those utilities that the family will be responsible for paying.

Housing Quality Standards & Rent Reasonableness Determination

8-II.C. PERIODIC (Annual/Biennial) INSPECTIONS [24 CFR 982.405 (b) and

Notice PIH 2016-05]

8-II.D. INTERIM (Special) INSPECTIONS [24 CFR 982.405(d)]

If a participant family or government official notifies the PHA of a potential deficiency, the following applies:

• If the reported deficiency is life-threatening, the PHA must, within 24 hours of

notification, both inspect the housing unit and notify the owner if the life-threatening deficiency is confirmed. The owner must then make the repairs within 24 hours of PHA notification.

• If the reported deficiency is non-life-threatening, the PHA must, within 15 (fifteen) days

of notification, both inspect the unit and notify the owner if the deficiency is confirmed. The owner must then make the repairs within 30 (thirty) days of notification from the PHA or within any PHA-approved extension.

Housing Quality Standards & Rent Reasonableness Determination

8-II.E. SUPERVISORY QUALITY CONTROL INSPECTIONS [24 CFR 982.405(b); 24

CFR 985.3(e); HCV GB, p. 10-32] HUD requires a PHA supervisor or other qualified person to conduct quality control inspections of a sample of units to ensure that each inspector is conducting accurate and complete inspections and that there is consistency in the application of the NSPIRE standards. The unit sample must include only units that have been inspected within the preceding three months. The selected sample should be drawn to represent a cross section of neighborhoods and the work of a cross section of inspectors.

8-II.F. INSPECTION RESULTS AND REINSPECTIONS FOR UNITS UNDER

HAP CONTRACT

The following is applicable to HAP contracts executed or renewed June 5, 2024, or earlier: Notification of Corrective Actions The owner and the family will be notified in writing of the results of all inspections. When an inspection identifies deficiencies, the PHA will determine (1) whether or not the failure is a life- threatening condition and (2) whether the family or owner is responsible.

The following is applicable to HAP contracts executed or renewed June 6, 2024, or later: Notification of Corrective Actions [24 CFR 982.404(d)(1)] The owner must maintain the unit in accordance with housing quality standards. The unit is in noncompliance with housing quality standards if: Housing Quality Standards & Rent Reasonableness Determination

• The PHA or authorized inspector determines the unit has housing quality standards

deficiencies based upon an inspection

• The PHA notified the owner in writing of the unit housing quality standards deficiencies; and
• The unit's housing quality standards deficiencies are not corrected within the required

timeframes. A PHA may withhold assistance payments for units that have deficiencies once the owner has been notified in writing of the deficiencies. The PHA's administrative plan must identify the conditions under which the PHA will withhold HAP. In this case, if the unit is brought into compliance during the applicable cure period, the PHA must resume assistance payments and provide payments to cover the time period for which the payments were withheld. The PHA must abate the HAP, including amounts that had been withheld, if the owner fails to make the repairs within the applicable cure period. In this case, the PHA must notify the family and the owner that it is abating payments and, if the unit does not meet housing quality standards within 60 days (or a reasonable longer period established by the PHA), the PHA will terminate the HAP contract for the unit and the family will have to move to receive continued assistance. In this case, the PHA must issue the family its voucher to move at least 30 days prior to the termination of the HAP contract.

Housing Quality Standards & Rent Reasonableness Determination

Housing Quality Standards & Rent Reasonableness Determination

The length of the extension will be determined on a case-by-case basis, but will not exceed 60 days, except in the case of delays caused by weather conditions. In the case of weather conditions, extensions may be continued until the weather has improved sufficiently to make repairs possible. The necessary repairs must be made within 15 (fifteen) calendar days, once the weather conditions have subsided. Reinspections [24 CFR 982.405(i)] When a PHA must verify correction of a deficiency, the PHA may use verification methods other than another on-site inspection. The PHA may establish different verification methods for initial and non-initial inspections or for different deficiencies. Upon either an inspection for initial occupancy or a reinspection, the PHA may accept photographic evidence or other reliable evidence from the owner to verify that a deficiency has been corrected.

Housing Quality Standards & Rent Reasonableness Determination

8-II.G. ENFORCING OWNER COMPLIANCE

If the owner fails to maintain the dwelling unit in accordance with HQS standards, the PHA must take prompt and vigorous action to enforce the owner obligations. The following is applicable to HAP contracts executed or renewed June 5, 2024, or earlier: HAP Abatement If an owner fails to correct deficiencies by the time specified by the PHA, HUD requires the PHA to abate housing assistance payments no later than the first of the month following the specified correction period (including any approved extension) [24 CFR 985.3(f)]. No retroactive payments will be made to the owner for the period of time the rent was abated. Owner rents are not abated as a result of deficiencies that are the family's responsibility.

The following is applicable to HAP contracts executed or renewed June 6, 2024, or later: HAP Withholding [24 CFR 982.404(d)(1)] A PHA may withhold assistance payments for units that have housing quality standards deficiencies once the PHA has notified the owner in writing of the deficiencies. The PHA's administrative plan must identify the conditions under which the PHA will withhold HAP. In this Housing Quality Standards & Rent Reasonableness Determination

case, if the unit is brought into compliance during the applicable cure period, the PHA resumes assistance payments and provides assistance payments to cover the time period for which the payments were withheld.

Housing Quality Standards & Rent Reasonableness Determination

HAP Contract Termination The PHA must decide how long any abatement period will continue before the HAP contract will be terminated. The PHA should not terminate the contract until the family finds another unit, provided the family does so in a reasonable time [HCV GB p. 10-29] and must give the owner reasonable notice of the termination. The PHA will issue a voucher to permit the family to move to another unit as described in Chapter 10.

8-II.H. ENFORCING FAMILY COMPLIANCE WITH HQS [24 CFR 982.404(b)]

The following is applicable to HAP contracts executed or renewed June 5, 2024, or earlier: Families are responsible for correcting any deficiencies listed in paragraph 8-I.D. If the family fails to correct a violation within the period allowed by the PHA (and any extensions), the PHA will terminate the family's assistance, according to the policies described in Chapter 12. If the owner carries out a repair for which the family is responsible under the lease, the owner may bill the family for the cost of the repair.

The following is applicable to HAP contracts executed or renewed June 6, 2024, or later: If the PHA waived the landlord responsibility for housing quality standards deficiencies that have been determined to have been caused by the tenant, any member of the household, or any guest or other person under the tenant's control (see section 8-I.D), the family is responsible for correcting any housing quality standards violations listed in paragraph 8.I.D. If the family fails to correct a violation within the period allowed by the PHA (and any extensions), the PHA will terminate the family's assistance, according to the policies described in Chapter 12. If the owner carries out a repair for which the family is responsible under the lease, the owner may bill the family for the cost of the repair and may enter into a repayment agreement with the family.

Housing Quality Standards & Rent Reasonableness Determination

Part Iii: Rent Reasonableness [24 Cfr 982.507]

8-III.A. OVERVIEW

Except in the case of certain LIHTC- and HOME-assisted units, no HAP contract can be approved until the PHA has determined that the rent for the unit is reasonable. The purpose of the rent reasonableness test is to ensure that a fair rent is paid for each unit rented under the HCV program. HUD regulations define a reasonable rent as one that does not exceed the rent charged for comparable, unassisted units in the same market area. HUD also requires that owners not charge more for assisted units than for comparable units on the premises. This part explains the method used to determine whether a unit's rent is reasonable. PHA-Owned Units [24 CFR 982.352(b)] In cases where an HCV family is receiving assistance in a PHA-owned unit, the PHA must obtain the services of an independent entity to determine rent reasonableness in accordance with program requirements, and to assist the family in negotiating the contract rent when the family requests assistance. A PHA-owned unit is defined as a unit that is owned by the PHA that administers the assistance under the consolidated ACC (including a unit owned by an entity substantially controlled by the PHA). The independent agency must communicate the results of the rent reasonableness determination to the family and the PHA. The independent agency must be approved by HUD and may be the unit of general local government for the PHA jurisdiction (unless the PHA is itself the unit of general local government or an agency of such government).

8-III.B. WHEN RENT REASONABLENESS DETERMINATIONS ARE REQUIRED

Owner-Initiated Rent Determinations The PHA must make a rent reasonableness determination at initial occupancy and whenever the owner requests a rent adjustment. The owner and family first negotiate the rent for a unit. The PHA (or independent agency in the case of PHA-owned units) will assist the family with the negotiations upon request. At initial occupancy the PHA must determine whether the proposed rent is reasonable before a HAP Contract is signed. The owner must not change the rent during the initial lease term. Subsequent requests for rent adjustments must be consistent with the lease between the owner and the family. Rent increases will not be approved unless any failed items identified by the most recent inspection have been corrected.

Housing Quality Standards & Rent Reasonableness Determination

The Authority will determine whether the requested increase is reasonable. The owner will be notified of the determination in writing. All rents adjustments will be effective the first of the month following sixty (60) days after the Authority's receipt of the owner's request or on the date specified by the owner, whichever is later. last inspection reflect a "pass" status within the previous twelve (12) month period for the Authority to consider the request. Units that reflect a "fail" status will not be considered and will be denied. The Owner will have to resubmit a new request to increase the contract rent when their rental unit(s) reflect a "pass" status. Rent increases must be in compliance with state/local law and may require more than the minimum 60-day period. PHA and HUD-Initiated Rent Reasonableness Determinations HUD requires the PHA to make a determination of rent reasonableness (even if the owner has not requested a change) if there is a 10 percent decrease in the fair market rent that goes into effect at least 60 days before the contract anniversary date. HUD also may direct the PHA to make a determination at any other time. The PHA may decide that a new determination of rent reasonableness is needed at any time.

Housing Quality Standards & Rent Reasonableness Determination

8-III.C. HOW COMPARABILITY IS ESTABLISHED

Factors to Consider HUD requires PHAs to take into consideration the factors listed below when determining rent comparability. The PHA may use these factors to make upward or downward adjustments to the rents of comparison units when the units are not identical to the HCV-assisted unit.

• Location and age
• Unit size including the number of rooms and square footage of rooms
• The type of unit including construction type (e.g., single family, duplex, garden, low-rise,

high-rise)

• The quality of the units including the quality of the original construction, maintenance and

improvements made

• Amenities, services, and utilities included in the rent

Units that Must Not Be Used as Comparables Comparable units must represent unrestricted market rents. Therefore, units that receive some form of federal, state, or local assistance that imposes rent restrictions cannot be considered comparable units. These include units assisted by HUD through any of the following programs: Section 8 project-based assistance, Section 236 and Section 221(d)(3) Below Market Interest Rate (BMIR) projects, HOME or Community Development Block Grant (CDBG) program- assisted units in which the rents are subsidized; units subsidized through federal, state, or local tax credits; units subsidized by the Department of Agriculture rural housing programs, and units that are rent-controlled by local ordinance [Notice PIH 2002-22, Notice PIH 2005-20, and Notice PIH 2020-19]. Note: Notice PIH 2020-19, issued August 21, 2020, provides further guidance on the issue of what constitutes an assisted unit. Rents Charged for Other Units on the Premises The Request for Tenancy Approval (HUD-52517) requires owners to provide information, on the form itself, about the rent charged for other unassisted comparable units on the premises if the premises include more than 4 units. By accepting the PHA payment each month the owner certifies that the rent is not more than the rent charged for comparable unassisted units on the premises. If asked to do so, the owner must give the PHA information regarding rents charged for other units on the premises.

8-III.D. PHA RENT REASONABLENESS METHODOLOGY

How Market Data Is Collected

areas may be defined by zip codes, census tract, neighborhood, and identifiable natural or man-made boundaries. The data will be updated on an ongoing basis and rent information that is more than 12 months old will be eliminated from the database. How Rents Are Determined

Housing Quality Standards & Rent Reasonableness Determination

EXHIBIT 8-1: OVERVIEW OF HUD HOUSING QUALITY STANDARDS Note: This document provides an overview of HQS. For more detailed information see the following documents:

• 24 CFR 982.401, Housing Quality Standards (HQS)
• Housing Choice Voucher Guidebook, Chapter 10.
• HUD Housing Inspection Manual for Section 8 Housing
• HUD Inspection Form, form HUD-52580 (3/01) and Inspection Checklist, form

HUD-52580-A (9/00) Sanitary Facilities The dwelling unit must include sanitary facilities within the unit. The sanitary facilities must be usable in privacy and must be in proper operating condition and adequate for personal cleanliness and disposal of human waste. Food Preparation and Refuse Disposal The dwelling unit must have space and equipment suitable for the family to store, prepare, and serve food in a sanitary manner. Space and Security The dwelling unit must provide adequate space and security for the family. This includes having at least one bedroom or living/sleeping room for each two persons. Thermal Environment The unit must have a safe system for heating the dwelling unit. Air conditioning is not required but if provided must be in proper operating condition. The dwelling unit must not contain unvented room heaters that burn gas, oil, or kerosene. Portable electric room heaters or kitchen stoves with built-in heating units are not acceptable as a primary source of heat for units located in climatic areas where permanent heat systems are required. Illumination and Electricity Each room must have adequate natural or artificial illumination to permit normal indoor activities and to support the health and safety of occupants. The dwelling unit must have sufficient electrical sources so occupants can use essential electrical appliances. Minimum standards are set for different types of rooms. Once the minimum standards are met, the number, type and location of electrical sources are a matter of tenant preference. Structure and Materials The dwelling unit must be structurally sound. Handrails are required when four or more steps (risers) are present, and protective railings are required when porches, balconies, and stoops are thirty inches or more off the ground. The elevator servicing the unit must be working [if there is one]. Manufactured homes must have proper tie-down devices capable of surviving wind loads common to the area.

Housing Quality Standards & Rent Reasonableness Determination

Interior Air Quality The dwelling unit must be free of air pollutant levels that threaten the occupants' health. There must be adequate air circulation in the dwelling unit. Bathroom areas must have one openable window or other adequate ventilation. Any sleeping room must have at least one window. If a window was designed to be opened, it must be in proper working order. Water Supply The dwelling unit must be served by an approved public or private water supply that is sanitary and free from contamination. Plumbing fixtures and pipes must be free of leaks and threats to health and safety. Lead-Based Paint Lead-based paint requirements apply to dwelling units built prior to 1978 that are occupied or can be occupied by families with children under six years of age, excluding zero bedroom dwellings. Owners must:

• Disclose known lead-based paint hazards to prospective tenants before the lease is signed,
• provide all prospective families with "Protect Your Family from Lead in Your Home",
• Stabilize deteriorated painted surfaces and conduct hazard reduction activities within 30 days

when identified by the PHA

• Notify tenants each time such an activity is performed
• Conduct all work in accordance with HUD safe practices
• As part of ongoing maintenance ask each family to report deteriorated paint
• Maintain covered housing without deteriorated paint if there is child under six in the family

For units occupied by elevated blood lead level (lead poisoned) children under six years of age, an environmental investigation must be conducted (paid for by the PHA). If lead hazards are identified during the environmental investigation, the owner must complete hazard reduction activities within 30 days. See HCV GB p. 10-15 for a detailed description of these requirements. For additional information on lead-based paint requirements see 24 CFR 35, Subparts A, B, M, and R. Access Use and maintenance of the unit must be possible without unauthorized use of other private properties. The building must provide an alternate means of exit in case of fire. Site and Neighborhood The site and neighborhood must be reasonably free from disturbing noises and reverberations, excessive trash or vermin, or other dangers to the health, safety, and general welfare of the occupants.

Housing Quality Standards & Rent Reasonableness Determination

Sanitary Condition The dwelling unit and its equipment must be in sanitary condition and free of vermin and rodent infestation. The unit must have adequate barriers to prevent infestation. Smoke Detectors Smoke detectors must be installed in accordance with and meet the requirements of the National Fire Protection Association Standard (NFPA) 74 (or its successor standards). If the dwelling unit is occupied by any person with a hearing impairment, smoke detectors must have an appropriate alarm system as specified in NFPA 74 (or successor standards). Hazards and Heath/Safety The unit, interior and exterior common areas accessible to the family, the site, and the surrounding neighborhood must be free of hazards to the family's health and safety.

EXHIBIT 8-2: SUMMARY OF TENANT PREFERENCE AREAS RELATED TO HOUSING QUALITY Note: This document provides an overview of unit and site characteristics and conditions for which the family determines acceptability. For more detailed information see the following documents:

• Housing Choice Voucher Guidebook, Chapter 10.
• HUD Housing Inspection Manual for Section 8 Housing
• HUD Inspection Form, form HUD-52580 (3/01) and Inspection Checklist, form

HUD-52580-A (9/00) Provided the minimum housing quality standards have been met, HUD permits the family to determine whether the unit is acceptable with regard to the following characteristics.

• Sanitary Facilities. The family may determine the adequacy of the cosmetic condition and

quality of the sanitary facilities, including the size of the lavatory, tub, or shower; the location of the sanitary facilities within the unit; and the adequacy of the water heater.

• Food Preparation and Refuse Disposal. The family selects size and type of equipment it

finds acceptable. When the family is responsible for supplying cooking appliances, the family may choose to use a microwave oven in place of a conventional oven, stove, or range. When the owner is responsible for providing cooking appliances, the owner may offer a microwave oven in place of an oven, stove, or range only if other subsidized and unsubsidized units on the premises are furnished with microwave ovens only. The adequacy of the amount and type of storage space, the cosmetic conditions of all equipment, and the size and location of the kitchen are all determined by the family.

• Space and Security. The family may determine the adequacy of room sizes and room

locations. The family is also responsible for deciding the acceptability of the type of door and window locks.

Housing Quality Standards & Rent Reasonableness Determination

• Energy conservation items. The family may determine whether the amount of insulation,

presence of absence of storm doors and windows and other energy conservation items are acceptable.

• Illumination and Electricity. The family may determine whether the location and the number

of outlets and fixtures (over and above those required to meet HQS standards) are acceptable or if the amount of electrical service is adequate for the use of appliances, computers, or stereo equipment.

• Structure and Materials. Families may determine whether minor defects, such as lack of

paint, or worn flooring or carpeting will affect the livability of the unit.

• Indoor Air. Families may determine whether window and door screens, filters, fans, or other

devices for proper ventilation are adequate to meet the family's needs. However, if screens are present they must be in good condition.

• Sanitary Conditions. The family determines whether the sanitary conditions in the unit,

including minor infestations, are acceptable.

• Neighborhood conditions. Families may determine whether neighborhood conditions such as

the presence of drug activity, commercial enterprises, and convenience to shopping will affect the livability of the unit. Families have no discretion with respect to lead-based paint standards and smoke detectors.

Housing Quality Standards & Rent Reasonableness Determination

NATIONAL STANDARDS FOR THE PHYSICAL INSPECTION OF REAL ESTATE

AND RENT REASONABLENESS DETERMINATIONS [24 CFR 5 Subpart G and Notice PIH 2024-26]

Introduction

This chapter is applicable after the Authority's NSPIRE compliance date. Prior to this date, the Authority will follow policies as outlined in Chapter 8.A. and Project Based Voucher (PBV) assistance in accordance with housing quality standards. Units assisted under the program must comply with HUD's National Standards for the Physical Inspection of Real Estate (NSPIRE) regulations and standards no later than October 1, 2025. The inspection performance standards and procedures for conducting NSPIRE inspections must be included in the administrative plan [Notice PIH 2024-26].All units must pass an inspection prior to the approval of a lease (with some exceptions)and at least once every 24 months during the term of the HAP contract, and at other times as needed, to determine that the unit meets housing quality standards. HUD also requires PHAs to determine that rents for units under the program are reasonable when compared to comparable unassisted units in the market area. Provided they meet certain requirements, HUD permits PHAs to establish some additional local requirements in their administrative plans. The use of the term NSPIRE standards in this plan refers to the combination of both HUD and PHA-established requirements. However, state and local codes, compliance is not part of the determination of whether a unit passes the NSPIRE standards. This chapter explains HUD and PHA requirements related to physical inspections and rent reasonableness as follows: Part I. Physical Standards. This part discusses NSPIRE standards required of units occupied by HCV and PBV-assisted families. It also identifies affirmative habitability requirements for all units and life-threatening conditions that must be corrected in 24 hours. Part II. The Inspection Process. This part describes the types of inspections the PHA will make and the steps that will be taken when units do not meet NSPIRE standards. Part III. Rent Reasonableness Determinations. This part discusses the policies the PHA will use to make rent reasonableness determinations. Special NSPIRE requirements for homeownership, manufactured homes, and other special housing types are discussed in Chapter 15 to the extent that they apply in this jurisdiction. Special requirements for the PBV and RAD PBV programs (if applicable) are discussed in Chapters 17 and 18, respectively.

Housing Quality Standards & Rent Reasonableness Determination

NSPIRE and HQS Even once the HQS inspection standard has sunset, the regulations at 24 CFR Part 982 and 983 governing the HCV and PBV programs will continue to use the terms HQS and housing quality standards rather than NSPIRE. This is because the definition of housing quality standards (HQS) at 24 CFR 982.4 means the minimum quality standards developed by HUD in accordance with 24 CFR 5.703 for the HCV program, including any variations approved by HUD for the PHA. As such, the model policy uses the term housing quality standards whenever applicable regulations use this term. Except in the chapter describing HQS, the acronym HQS is not used in the model policy in order to avoid confusion between the umbrella term meaning housing standards and the specific inspection protocol. The model policy only uses the term NSPIRE when referring to specific NSPIRE standards.

Housing Quality Standards & Rent Reasonableness Determination

PART I: NSPIRE STANDARDS

NSPIRE standards are published on HUD's NSPIRE website as well as in the NSPIRE Final Rule [FR Notice 5/1//2023].

8-I.A. INSPECTABLE AREAS [24 CFR 5.703(a)(1) and 24 CFR 5.705(a)(2)]

NSPIRE defines the inspectable areas for inspection under the standards as inside, outside and unit. However, the inspection requirement for the HCV and PBV programs only applies to units occupied or to be occupied by HCV or PBV participants and common areas and exterior areas which either service or are associated with such units.

8-I.B. AFFIRMATIVE HABITABILITY REQUIREMENTS [24 CFR 5.703(b), (c),

and (d)] NSPIRE provides for minimum, or affirmative, habitability requirements for each area (unit, inside, outside). These areas must meet these requirements for habitability, which are listed in Exhibit 8-1. The inside, outside and unit must be free of health and safety hazards that pose a danger to residents. Types of health and safety concerns include, but are not limited to carbon monoxide, electrical hazards, extreme temperature, flammable materials or other fire hazards, garbage and debris, handrail hazards, infestation, lead-based paint, mold, and structural soundness [24 CFR 5.703(e). The NSPIRE Smoke Alarm Standard does not require that smoke alarms have a sealed battery; however, upon the effective date of the Public and Federally Assisted Housing Fire Safety Act of 2022 on December 29, 2024, sealed batteries will be required.

8-I.C. Modifications to Provide Accessibility [24 CFR 100.203; Notice 2003-31; and Notice

PIH 2014-02] Under the Fair Housing Act of 1988 an owner must make reasonable accommodations in rules, policies, practices, or services if necessary for a person with disabilities to use the housing and must not refuse the request of a family that contains a person with a disability to make necessary and reasonable modifications to the unit if such modification is necessary to afford the person with a disability full enjoyment of the premises. Such modifications are at the family's expense. The owner may, where it is reasonable to do so, require restoration of the unit to its original condition (reasonable wear and tear excepted) if the modification would interfere with the owner or next occupant's full enjoyment of the premises. The owner may not increase a customarily required security deposit. However, the landlord may negotiate a restoration agreement that requires the family to restore the unit and, if necessary to ensure the likelihood of restoration, may require the tenant to pay a reasonable amount into an interest- bearing escrow account over a reasonable period of time. The interest in any such account accrues to the benefit of the tenant. The owner may also require reasonable assurances that the quality of the work will be acceptable and that any required building permits will be obtained. [24 CFR 100.203; Notice 2003-31]. Modifications to units to provide access for a person with a disability must meet all applicable NSPIRE requirements and conform to the design, construction, or alteration of facilities contained in the UFAS and the ADA Accessibility Guidelines (ADAAG) [28 CFR 35.151(c) and Housing Quality Standards & Rent Reasonableness Determination

Notice 2003-31] See Chapter 2 of this plan for additional information on reasonable accommodations for persons with disabilities.

8-I.D. ADDITIONAL LOCAL REQUIREMENTS [24 CFR 5.705(a)(3) and

Notice PIH 2024-26] The PHA may impose variations to the NSPIRE standards as long as the additional criteria are not likely to adversely affect the health or safety of participant families or severely restrict housing choices for families. HUD approval is required for variations to NSPIRE standards and approved variations must be added to the administrative plan. HUD may approve inspection criteria variations if the variations apply standards in local housing codes or other codes adopted by the PHA or because of local climatic or geographic conditions. Acceptability criteria variations may only be approved by HUD if such variations either meet or exceed the performance requirements or significantly expand affordable housing opportunities for families assisted under the program.

Housing Quality Standards & Rent Reasonableness Determination

8-I.E. LIFE-THREATENING DEFICIENCIES [Notice PIH 2024-26]

HUD previously required the PHA to define life-threatening conditions in the administrative plan. The NSPIRE standards now describe those conditions which are considered life-threatening and must be corrected within 24 hours.

The following are a list of life-threatening deficiencies under NSPIRE:

Inspectable Item Deficiency

Call-for-Aid System System is blocked, or pull cord is higher than 6 inches off the floor.

System does not function properly

Carbon Monoxide Alarm Carbon monoxide alarm is missing, not installed, or not installed in a proper location.

Carbon monoxide alarm is obstructed.

Carbon monoxide alarm does not produce an audio or visual alarm when tested.

Chimney A visually accessible chimney, flue, or firebox connected to a fireplace or wood-burning appliance is incomplete or damaged such that it may not safely contain fire and convey smoke and combustion gases to the exterior.

Chimney exhibits signs of structural failure.

Clothes Dryer Exhaust Electric dryer transition duct is detached or missing. Ventilation Gas dryer transition duct is detached or missing.

Electric dryer exhaust ventilation system has restricted airflow.

Dryer transition duct is constructed of unsuitable material.

Gas dryer exhaust ventilation system has restricted airflow.

Door – Entry Entry door is missing.

Door – Fire Labeled Fire labeled door is missing.

Egress Obstructed means of egress.

Sleeping room is located on the third floor or below and has an Housing Quality Standards & Rent Reasonableness Determination

Inspectable Item Deficiency obstructed rescue opening.

Fire escape is obstructed.

Electrical – Conductor, Outlet or switch is damaged. Outlet, and Switch Exposed electrical conductor.

Water is currently in contact with an electrical conductor.

Electrical – Service Panel The overcurrent protection device is damaged.

Exit Sign Exit sign is damaged, missing, obstructed, or not adequately illuminated.

Fire Escape Fire escape component is damaged or missing.

Fire Extinguisher Fire extinguisher pressure gauge reads over or under-charged.

Fire extinguisher service tag is missing, illegible, or expired.

Fire extinguisher is damaged or missing.

Flammable and Flammable or combustible item is on or within 3 feet of an Combustible Items appliance that provides heat for thermal comfort or a fuel-burning water heater; OR

Improperly stored chemicals.

Guardrail Guardrail is missing or not installed.

Guardrail is not functionally adequate.

Heating, Ventilation, and The inspection date is on or between October 1 and March 31 and Air Conditioning the permanently installed heating source is not working or the (HVAC) permanently installed heating source is working and the interior temperature is below 64 degrees Fahrenheit.

Unvented space heater that burns gas, oil, or kerosene is present.

Combustion chamber cover or gas shutoff valve is missing from a fuel burning heating appliance.

Fuel burning heating system or device exhaust vent is misaligned, blocked, disconnected, improperly connected, damaged, or Housing Quality Standards & Rent Reasonableness Determination

Inspectable Item Deficiency missing.

Leak – Gas or Oil Natural gas, propane, or oil leak.

Mold-like Substance Presence of mold-like substance at extremely high levels is observed visually.

Smoke Alarm Smoke alarm is not installed where required.

Smoke alarm is obstructed.

Smoke alarm does not produce an audio or visual alarm when tested.

Sprinkler Assembly Sprinkler head assembly is encased or obstructed by an item or object that is within 18 inches of the sprinkler head.

Sprinkler assembly component is damaged, inoperable, or missing and it is detrimental to performance.

Sprinkler assembly has evidence of corrosion.

Sprinkler assembly has evidence of foreign material that is detrimental to performance.

Structural System Structural system exhibits signs of serious failure.

Toilet Only 1 toilet was installed, and it is missing.

Water Heater Chimney or flue piping is blocked, misaligned, or missing.

Gas shutoff valve is damaged, missing, or not installed.

However, PHAs may add additional deficiencies which the PHA considers life-threatening provided they are described in the administrative plan.

8-I.F. Owner And Family Responsibilities [24 Cfr 982.404]

The following is applicable to HAP contracts executed or renewed June 5, 2024, or earlier: Housing Quality Standards & Rent Reasonableness Determination

Family Responsibilities The family is responsible for correcting the following deficiencies:

• Tenant-paid utilities not in service
• Failure to provide or maintain appliances owned by the family
• Damage to the unit or premises caused by a household member or guest beyond ordinary

wear and tear. If a family fails to correct a family-caused life-threatening condition as required by the PHA, the PHA will enforce the family obligations. See 8-II.H.

The following is applicable to HAP contracts executed or renewed June 6, 2024, or later: Owner Obligation The owner must maintain the unit in accordance with housing quality standards. A unit is not in compliance with housing quality standards if the PHA or other inspector authorized by the state or local government determines that the unit has housing quality standards deficiencies based upon an inspection, notifies the owner in writing of the deficiencies, and the deficiencies are not remedied within the appropriate time frame. In the case of a housing quality standards deficiency that the PHA determines is caused by the tenant, any member of the household, or any guest or other person under the tenant's control (other than damage resulting from ordinary use), the PHA may waive the owner's responsibility to remedy the violation. The HAP to the owner may not be withheld or abated if the owner Housing Quality Standards & Rent Reasonableness Determination

responsibility has been waived. However, if the family's actions constitute a serious or repeated lease violation, the owner may take legal action to evict the family. In addition, the PHA may terminate the family's assistance because of a housing quality standards breach (beyond damage resulting from ordinary use) caused by any member of the household, guest, or other person under the tenant's control.

• Tenant-paid utilities not in service;
• Failure to provide or maintain appliances owned by the family; and
• Damage to the dwelling unit or premises caused by a household member or guest beyond

ordinary wear and tear.

• If the housing quality standards breach caused by the family is life-threatening, the family

must take all steps permissible under the lease and state and local law to ensure the deficiency is corrected within 24 hours of notification.

• For other family-caused deficiencies, the family must take all steps permissible under the

lease and state and local law to ensure the deficiency is corrected within 30 calendar days of notification (or any PHA-approved extension). If the family has caused a breach of the HQS, the PHA must take prompt and vigorous action to enforce the family obligations. The PHA may terminate assistance for the family in accordance with 24 CFR 982.552.

8-I.G. LEAD-BASED PAINT

PHAs and owners must comply with the requirements and timelines in 24 CFR Part 35 Subpart M—Tenant-Based Rental Assistance and Subpart H—Project-Based Assistance. PHAs and owners are reminded that any deteriorated paint in target housing, or other lead-based paint

Housing Quality Standards & Rent Reasonableness Determination

hazard identified through a lead-based paint risk assessment or lead-based paint inspection is considered a violation of NSPIRE standards. For the HCV program, Subpart M applies to units where a child under age six resides or is expected to reside, common areas that service that unit, and exterior painted surfaces associated with that unit or common areas. For project-based programs, Subpart H applies to assisted units and common areas of the property regardless of whether a child under age six resides or is expected to reside in the unit. NSPIRE does not alter any of the lead-based paint requirements in Part 35 for these programs. Special Requirements for Children with Elevated Blood Lead Level [24 CFR 35.1225; FR Notice 1/13/17; Notice PIH 2017-13] If a PHA is notified by a public health department or other medical health care provider, or verifies information from a source other than a public health department or medical health care provider, that a child of less than six years of age, living in an HCV-assisted unit has been identified as having an elevated blood lead level, the PHA must complete an environmental investigation of the dwelling unit within 15 calendar days after being notified by a public health department or other medical health care provider. The environmental investigation must be completed in accordance with program requirements, and the result of the environmental investigation must be immediately provided to the owner of the dwelling unit. In cases where the public health department has already completed an evaluation of the unit, this information must be provided to the owner. Within 30 days after receiving the environmental investigation report from the PHA, or the evaluation from the public health department, the owner is required to complete the reduction of identified lead-based paint hazards in accordance with the lead-based paint regulations [24 CFR 35.1325 and 35.1330; 40 CFR 745.227]. If the owner does not complete the "hazard reduction" as required, the dwelling unit is in violation of NSPIRE and the PHA will take action in accordance with Section 8-II.G. PHA reporting requirements, and data collection and record keeping responsibilities related to children with an elevated blood lead level are discussed in Chapter 16.

Housing Quality Standards & Rent Reasonableness Determination

8-I.H. VIOLATION OF SPACE STANDARDS [24 CFR 5.703(d)(5)]

Units assisted under the HCV or PBV programs must have at least one bedroom or living/sleeping room for each two persons. A living room may be used as sleeping (bedroom) space, but no more than two persons may occupy the space [HCV GB p. 10-6]. Each habitable room must have two working outlets or one working outlet and a permanent light. HUD defines a habitable room as a room in a building for living, sleeping, eating, or cooking, but excluding bathrooms, toilet rooms, closets, hallways, storage or utility spaces, and similar areas [FR Notice 5/11/23]. A unit that does not meet these space standards is defined as overcrowded. If the PHA determines that a unit is overcrowded because of an increase in family size or a change in family composition, the PHA must issue the family a new voucher, and the family must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the PHA must terminate the HAP contract in accordance with its terms.

Part Ii: The Inspection Process

8-II.A. OVERVIEW [24 CFR 982.405]

Types of Inspections The PHA conducts the following types of inspections as needed. Each type of inspection is discussed in the paragraphs that follow.

• Initial Inspections. The PHA conducts initial inspections in response to a request from the

family to approve a unit for participation in the HCV program.

• Periodic (Annual/Biennial) Inspections. HUD requires the PHA to inspect each unit under

lease at least annually or biennially (or triennially for small rural PHAs as defined in 24 CFR 982.305(b)(2)), depending on PHA policy, to confirm that the unit still meets NSPIRE housing quality standards.

• Interim (Special) Inspections. A special inspection may be requested by the owner, the

family, or a third party as a result of problems identified with a unit between annual inspections.

• Supervisory Quality Control Inspections. HUD requires that a sample of units be inspected

by a supervisor or other qualified individual to evaluate the work of the inspector(s) and to ensure that inspections are performed in compliance with the housing quality standards. Inspection of PHA-Owned Units [24 CFR 982.352(b)] The PHA must obtain the services of an independent entity to perform all inspections in cases where an HCV family is receiving assistance in a PHA-owned unit as defined in 24 CFR 982.4. The independent entity must communicate the results of each inspection to the family and the PHA. The independent agency must be approved by HUD and may be the unit of general local government for the PHA jurisdiction (unless the PHA is itself the unit of general local government or an agency of such government). Housing Quality Standards & Rent Reasonableness Determination

For information on the inspection of PHA-owned units in the PBV program, see Chapters 17 and 18. Inspection Costs [Notice PIH 2016-05 and 24 CFR 5.705(h)] The PHA may not charge the family for unit inspections or reinspections [24 CFR 982.405(g)]. In the case of inspections of PHA-owned units, the PHA may compensate the independent agency from ongoing administrative fees (including fees credited to the administrative fee reserve) for inspections performed. The PHA and the independent agency may not charge the family any fee or charge for the inspection [24 CFR.982.352(b)(1)(v)(B)]. 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. However, the PHA may charge a reasonable fee to owners for reinspections 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 24 CFR 982.404(a), was not corrected. Fees may not be imposed for tenant-caused damages, for cases in which the inspector could not gain access to the unit, or for new deficiencies discovered during a reinspection. The owner may not pass the cost of a reinspection fee to the family. Reinspection fees must be added to the PHA's administrative fee reserves and may only be used for activities related to the provision of tenant-based assistance.

emergency, the Authority will give as much notice as possible, given the nature of the emergency. Owner and Family Inspection Attendance HUD permits the PHA to set policy regarding family and owner presence at the time of inspection [HCV GB p. 10-27].

8-II.B. INITIAL INSPECTION [24 CFR 982.405(a)]

HUD regulations require that units assisted under the HCV program be inspected to determine that the units meet housing quality standards before the PHA approves assisted tenancy. However, PHAs have two options for bringing units under HAP contract (or, in the case of PBV, approving occupancy and the execution of a lease) more quickly. The PHA may, but is not required to approve assisted tenancy and start HAP if the unit:

• Fails the initial inspection, but only if no life-threatening deficiencies are identified; and/or
• Passed an alternative inspection in the last 24 months.

If the PHA adopts the alternative inspection option in combination with the non-life-threatening deficiencies option, the PHA must follow family and owner notification requirements listed at 24 CFR 982.406(f). Otherwise, if neither of the above provisions are adopted, the PHA must determine that the unit the family selects meets NSPIRE standards prior to approving tenancy. Approving Units with Non-Life-Threatening Deficiencies [FR Notice 1/18/17; Notice PIH 2017-20; FR Notice 5/7/24; and 24 CFR 982.405(j)] The PHA may approve assisted tenancy, execute a HAP contract, and begin paying HAP if a unit fails an initial inspection, but only if the deficiencies identified are non-life threatening. This is known as the "NLT option." A PHA that implements the NLT option may apply the option to all of the PHA's initial inspections or may limit it to certain units. If the NLT option is adopted, the PHA must follow requirements listed at 24 CFR 982.405(j) for family and owner notification. The PHA's administrative plan must specify the circumstances under which the PHA will exercise the NLT option, if any.

Housing Quality Standards & Rent Reasonableness Determination

Approving Units Using Alternative Inspections [FR Notice 1/18/17; Notice PIH 2017-20; FR Notice 5/7/24; and 24 CFR 982.406] The PHA may approve assisted tenancy, execute a HAP contract, and begin paying HAP if a unit passed an alternative inspection (i.e., an inspection conducted for another housing program) conducted in the last 24 months provided the PHA is able to obtain the results of the alternative inspection, the property received a "pass" score (if applicable), and the inspection meets the requirements at 24 CFR 982.406(c) and (d). The PHA may implement the use of alternative inspections for both initial and periodic inspections or may limit the use of alternative inspections to either initial or periodic inspections. If alternative inspections are used, the PHA must follow requirements listed at 24 CFR 982.406(e)(2) for family and owner notification. A PHA relying on an alternative inspections must identify the alternative inspection method being used in the PHA's administrative plan.

Housing Quality Standards & Rent Reasonableness Determination

If the time period for correcting the deficiencies (or any Authority -approved extension) has elapsed, or the unit fails at the time of the reinspection, the Authority will notify the owner and the family that the unit has been rejected and that the family must search for another unit. The Authority may agree to conduct a second reinspection, for good cause, at the request of the family and owner. Following a failed reinspection, the family may submit a new Request for Tenancy Approval for the same unit after the owner has made repairs, if they are unable to locate another suitable unit. Utilities Generally, at initial lease-up the owner is responsible for demonstrating that all utilities are in working order including those utilities that the family will be responsible for paying.

8-II.C. PERIODIC (Annual/Biennial) INSPECTIONS [24 CFR 982.405 (b) and

Notice PIH 2016-05] HUD requires the PHA to inspect each unit under HAP contract at least biennially (or triennially for small rural PHAs), to confirm that the unit still meets NSPIRE standards. The inspection may be conducted in conjunction with the family's annual reexamination but also may be conducted separately.

inspection date that generally should take place within five (5) business days of the originally scheduled date. The Authority may schedule an inspection more than five (5) business days after the original date for good cause. If the family misses the first scheduled appointment without requesting a new inspection date, the Authority will automatically schedule a second inspection. If the family misses two scheduled inspections without Authority approval, the Authority will consider the family to have violated its obligation to make the unit available for inspection. This may result in termination of the family's assistance in accordance with Chapter 12.

8-II.D. INTERIM (Special) INSPECTIONS [24 CFR 982.405(d)]

If a participant family or government official notifies the PHA of a potential deficiency, the following applies:

• If the reported deficiency is life-threatening, the PHA must, within 24 hours of

notification, both inspect the housing unit and notify the owner if the life-threatening deficiency is confirmed. The owner must then make the repairs within 24 hours of PHA notification.

• If the reported deficiency is non-life-threatening, the PHA must, within 15 (fifteen) days

of notification, both inspect the unit and notify the owner if the deficiency is confirmed. The owner must then make the repairs within 30 (thirty) days of notification from the PHA or within any PHA-approved extension.

8-II.E. SUPERVISORY QUALITY CONTROL INSPECTIONS [24 CFR 982.405(b); 24

CFR 985.3(e); HCV GB, p. 10-32] HUD requires a PHA supervisor or other qualified person to conduct quality control inspections of a sample of units to ensure that each inspector is conducting accurate and complete inspections and that there is consistency in the application of the NSPIRE standards. The unit sample must include only units that have been inspected within the preceding three months. The selected sample should be drawn to represent a cross section of neighborhoods and the work of a cross section of inspectors.

8-II.F. INSPECTION RESULTS AND REINSPECTIONS FOR UNITS UNDER

HAP CONTRACT Correction Timeframes Each deficiency is identified in the NPSIRE standards as either life-threatening, severe, moderate, or low. Housing Quality Standards & Rent Reasonableness Determination

For units under HAP contract, life-threatening deficiencies must be corrected within 24 hours after notice has been provided. All other non-life-threatening deficiencies (severe and moderate) must be corrected within 30 days (or a PHA-approved extension) after notice has been provided. If low deficiencies are present in a unit, these deficiencies result in a pass and would only be noted by the inspector for informational purposes. The following is applicable to HAP contracts executed or renewed June 5, 2024, or earlier: Notification of Corrective Actions The owner and the family will be notified in writing of the results of all inspections. When an inspection identifies deficiencies, the PHA will determine (1) whether or not the failure is a life- threatening condition and (2) whether the family or owner is responsible.

The following is applicable to HAP contracts executed or renewed June 6, 2024, or later: Notification of Corrective Actions [24 CFR 982.404(d)(1)] The owner must maintain the unit in accordance with housing quality standards. The unit is in noncompliance with housing quality standards if:

• The PHA or authorized inspector determines the unit has housing quality standards

deficiencies based upon an inspection

• The PHA notified the owner in writing of the unit housing quality standards deficiencies; and
• The unit's housing quality standards deficiencies are not corrected within the required

timeframes. A PHA may withhold assistance payments for units that have deficiencies once the owner has been notified in writing of the deficiencies. The PHA's administrative plan must identify the Housing Quality Standards & Rent Reasonableness Determination

conditions under which the PHA will withhold HAP. In this case, if the unit is brought into compliance during the applicable cure period, the PHA must resume assistance payments and provide payments to cover the time period for which the payments were withheld. The PHA must abate the HAP, including amounts that had been withheld, if the owner fails to make the repairs within the applicable cure period. The PHA must notify the family and the owner that it is abating payments and, if the unit does not meet housing quality standards within 60 days (or a reasonable longer period established by the PHA), the PHA will terminate the HAP contract for the unit and the family will have to move to receive continued assistance.

Housing Quality Standards & Rent Reasonableness Determination

Housing Quality Standards & Rent Reasonableness Determination

8-II.G. ENFORCING OWNER COMPLIANCE

If the owner fails to maintain the dwelling unit in accordance with NSPIRE standards, the PHA must take prompt and vigorous action to enforce the owner obligations. The following is applicable to HAP contracts executed or renewed June 5, 2024, or earlier: HAP Abatement If an owner fails to correct deficiencies by the time specified by the PHA, HUD requires the PHA to abate housing assistance payments no later than the first of the month following the specified correction period (including any approved extension) [24 CFR 985.3(f)]. No retroactive payments will be made to the owner for the period of time the rent was abated. Owner rents are not abated as a result of deficiencies that are the family's responsibility.

The following is applicable to HAP contracts executed or renewed June 6, 2024, or later: HAP Withholding [24 CFR 982.404(d)(1)] A PHA may withhold assistance payments for units that have housing quality standards deficiencies once the PHA has notified the owner in writing of the deficiencies. The PHA's administrative plan must identify the conditions under which the PHA will withhold HAP. In this Housing Quality Standards & Rent Reasonableness Determination

case, if the unit is brought into compliance during the applicable cure period, the PHA resumes assistance payments and provides assistance payments to cover the time period for which the payments were withheld.

Housing Quality Standards & Rent Reasonableness Determination

HAP Contract Termination The PHA must decide how long any abatement period will continue before the HAP contract will be terminated. If the unit does not meet housing quality standards within 60 days (or a reasonable longer period established by the PHA), the PHA will terminate the HAP contract for the unit and the family will have to move to receive continued assistance. In this case, the PHA must issue the family its voucher to move at least 30 days prior to the termination of the HAP contract.

8-II.H. ENFORCING FAMILY COMPLIANCE [24 CFR 982.404(b)]

The following is applicable to HAP contracts executed or renewed June 5, 2024, or earlier: Families are responsible for correcting any deficiencies listed in paragraph 8-I.D. If the family fails to correct a violation within the period allowed by the PHA (and any extensions), the PHA will terminate the family's assistance, according to the policies described in Chapter 12. If the owner carries out a repair for which the family is responsible under the lease, the owner may bill the family for the cost of the repair.

The following is applicable to HAP contracts executed or renewed June 6, 2024, or later: If the PHA waived the landlord responsibility for housing quality standards deficiencies that have been determined to have been caused by the tenant, any member of the household, or any guest or other person under the tenant's control (see section 8-I.D), the family is responsible for correcting any housing quality standards violations listed in paragraph 8.I.D. If the family fails to correct a violation within the period allowed by the PHA (and any extensions), the PHA will terminate the family's assistance, according to the policies described in Chapter 12. If the owner carries out a repair for which the family is responsible under the lease, the owner may bill the family for the cost of the repair and may enter into a repayment agreement with the family.

Housing Quality Standards & Rent Reasonableness Determination

Part Iii: Rent Reasonableness [24 Cfr 982.507]

8-III.A. OVERVIEW

Except in the case of certain LIHTC- and HOME-assisted units, no HAP contract can be approved until the PHA has determined that the rent for the unit is reasonable. The purpose of the rent reasonableness test is to ensure that a fair rent is paid for each unit rented under the HCV program. HUD regulations define a reasonable rent as one that does not exceed the rent charged for comparable, unassisted units in the same market area. HUD also requires that owners not charge more for assisted units than for comparable units on the premises. This part explains the method used to determine whether a unit's rent is reasonable. PHA-Owned Units [24 CFR 982.352(b)] In cases where an HCV family is receiving assistance in a PHA-owned unit, the PHA must obtain the services of an independent entity to determine rent reasonableness in accordance with program requirements, and to assist the family in negotiating the contract rent when the family requests assistance. A PHA-owned unit is defined as a unit that is owned by the PHA that administers the assistance under the consolidated ACC (including a unit owned by an entity substantially controlled by the PHA). The independent agency must communicate the results of the rent reasonableness determination to the family and the PHA. The independent agency must be approved by HUD and may be the unit of general local government for the PHA jurisdiction (unless the PHA is itself the unit of general local government or an agency of such government).

8-III.B. WHEN RENT REASONABLENESS DETERMINATIONS ARE REQUIRED

Owner-Initiated Rent Determinations The PHA must make a rent reasonableness determination at initial occupancy and whenever the owner requests a rent adjustment. The owner and family first negotiate the rent for a unit. The PHA (or independent agency in the case of PHA-owned units) will assist the family with the negotiations upon request. At initial occupancy the PHA must determine whether the proposed rent is reasonable before a HAP Contract is signed. The owner must not change the rent during the initial lease term. Subsequent requests for rent adjustments must be consistent with the lease between the owner and the family. Rent increases will not be approved unless any failed items identified by the most recent inspection have been corrected.

Housing Quality Standards & Rent Reasonableness Determination

The Authority will determine whether the requested increase is reasonable. The owner will be notified of the determination in writing. All rents adjustments will be effective the first of the month following sixty (60) days after the Authority's receipt of the owner's request or on the date specified by the owner, whichever is later. last inspection reflect a "pass" status within the previous twelve (12) month period for the Authority to consider the request. Units that reflect a "fail" status will not be considered and will be denied. The Owner will have to resubmit a new request to increase the contract rent when their rental unit(s) reflect a "pass" status. Rent increases must be in compliance with state/local law and may require more than the minimum 60-day period. PHA and HUD-Initiated Rent Reasonableness Determinations HUD requires the PHA to make a determination of rent reasonableness (even if the owner has not requested a change) if there is a 10 percent decrease in the fair market rent that goes into effect at least 60 days before the contract anniversary date. HUD also may direct the PHA to make a determination at any other time. The PHA may decide that a new determination of rent reasonableness is needed at any time.

Housing Quality Standards & Rent Reasonableness Determination

8-III.C. HOW COMPARABILITY IS ESTABLISHED

Factors to Consider HUD requires PHAs to take into consideration the factors listed below when determining rent comparability. The PHA may use these factors to make upward or downward adjustments to the rents of comparison units when the units are not identical to the HCV-assisted unit.

• Location and age
• Unit size including the number of rooms and square footage of rooms
• The type of unit including construction type (e.g., single family, duplex, garden, low-rise,

high-rise)

• The quality of the units including the quality of the original construction, maintenance and

improvements made

• Amenities, services, and utilities included in the rent

Units that Must Not Be Used as Comparables Comparable units must represent unrestricted market rents. Therefore, units that receive some form of federal, state, or local assistance that imposes rent restrictions cannot be considered comparable units. These include units assisted by HUD through any of the following programs: Section 8 project-based assistance, Section 236 and Section 221(d)(3) Below Market Interest Rate (BMIR) projects, HOME or Community Development Block Grant (CDBG) program- assisted units in which the rents are subsidized; units subsidized through federal, state, or local tax credits; units subsidized by the Department of Agriculture rural housing programs, and units that are rent-controlled by local ordinance [Notice PIH 2002-22, Notice PIH 2005-20, and Notice PIH 2020-19]. Note: Notice PIH 2020-19, issued August 21, 2020, provides further guidance on the issue of what constitutes an assisted unit. Rents Charged for Other Units on the Premises The Request for Tenancy Approval (HUD-52517) requires owners to provide information, on the form itself, about the rent charged for other unassisted comparable units on the premises if the premises include more than 4 units. By accepting the PHA payment each month the owner certifies that the rent is not more than the rent charged for comparable unassisted units on the premises. If asked to do so, the owner must give the PHA information regarding rents charged for other units on the premises.

8-III.D. PHA RENT REASONABLENESS METHODOLOGY

How Market Data Is Collected

areas may be defined by zip codes, census tract, neighborhood, and identifiable natural or man-made boundaries. The data will be updated on an ongoing basis and rent information that is more than 12 months old will be eliminated from the database. How Rents Are Determined

Housing Quality Standards & Rent Reasonableness Determination

Exhibit 8-1: Affirmative Habitability Requirements

Affirmative Habitability Requirements: Inside Must include at least 1 battery-operated or hard-wired smoke detector, in proper working condition, on each level of the property. Must meet or exceed the carbon monoxide detection standards set by the Secretary through Federal Register notification. Any outlet installed within 6 feet of a water source must be GFCI protected. Must have a guardrail when there is an elevated walking surface with a drop off of 30 inches or greater measured vertically. Must have permanently mounted light fixtures in any kitchens and each bathroom. May not contain unvented space heaters that burn gas, oil or kerosene.

Affirmative Habitability Requirements: Outside Any outlet installed within 6 feet of a water source must be GFCI-protected. Must have a guardrail when there is an elevated walking surface with a drop off of 30 inches or greater measured vertically.

Housing Quality Standards & Rent Reasonableness Determination

Affirmative Habitability Requirements: Unit Must have hot and cold running water in the bathroom and kitchen, including an adequate source of safe drinking water in the bathroom and kitchen. Must include its own bathroom or sanitary facility that is in proper operating condition and usable in privacy. It must contain a sink, a bathtub or shower, and an interior flushable toilet. Must have at least one battery-operated or hard-wired smoke detector, in proper working condition, in the following locations:

• On each level of the unit AND
• Inside each bedroom or sleeping area AND
• With 21 feet of any door to a bedroom measured along a path of travel AND
• Where a smoke detector is installed outside a bedroom is separated from an adjacent living

area by a door, a smoke detector must also be installed in the living area side of the door. If the unit is occupied by a hearing-impaired person, the smoke detectors must have an alarm system designed for hearing-impaired persons. Must have a living room and a kitchen area with a sink, cooking appliance, refrigerator, food preparation area and food storage area. Must have two working outlets or one working outlet and one permanent light fixture within all habitable rooms. Must have a permanently mounted light fixture in each bathroom and in the kitchen. Outlets within 6 feet of water source must be GFCI-protected. Must have permanently installed heating source. No units may contain unvented space heaters that burn gas, oil or kerosene. Must have a guard rail when there is an elevated walking surface with a drop off of 30 inches or greater measured vertically. Must have at least one bedroom or living/sleeping room for each two persons.

Housing Quality Standards & Rent Reasonableness Determination

GENERAL LEASING POLICIES

INTRODUCTION Chapter 9 covers the lease-up process from the family's submission of a Request for Tenancy Approval to execution of the HAP contract. In order for the PHA to assist a family in a particular dwelling unit, or execute a Housing Assistance Payments (HAP) contract with the owner of a dwelling unit, the PHA must determine that all the following program requirements are met:

• The unit itself must qualify as an eligible unit [24 CFR 982.305(a)]
• The unit must be inspected by the PHA and pass applicable housing quality standards [24

CFR 982.305(a)]

• The lease offered by the owner must be approvable and must include the required Tenancy

Addendum [24 CFR 982.305(a)]

• The rent to be charged by the owner for the unit must be reasonable [24 CFR 982.305(a)]
• The owner must be an eligible owner, approvable by the PHA, with no conflicts of interest

[24 CFR 982.306]

• For families initially leasing a unit only: Where the gross rent of the unit exceeds the

applicable payment standard for the family, the share of rent to be paid by the family cannot exceed 40 percent of the family's monthly adjusted income [24 CFR 982.305(a)]

9-I.A. TENANT SCREENING

The PHA has no liability or responsibility to the owner or other persons for the family's behavior or suitability for tenancy [24 CFR 982.307(a)(1)]. The PHA may elect to screen applicants for family behavior or suitability for tenancy. See Chapter 3 for a discussion of the PHA's policies with regard to screening applicant families for program eligibility [24 CFR 982.307(a)(1)]. The owner is responsible for screening and selection of the family to occupy the owner's unit. At or before PHA approval of the tenancy, the PHA must inform the owner that screening and selection for tenancy is the responsibility of the owner [24 CFR 982.307(a)(2)]. The PHA must also inform the owner or manager or their rights and obligations under the Violence against Women Act (VAWA) [24 CFR 5.2005(a)(2)]. The PHA must provide the owner with the family's current and prior address (as shown in the PHA records) and the name and address (if known to the PHA) of the landlord at the family's current and prior address [24 CFR 982.307(b)(1)]. The PHA is permitted, but not required, to offer the owner other information in the PHA's possession about the tenancy history or drug trafficking of family members [24 CFR 982.307(b)(2)]. The PHA's policy on providing information to the owner must be included in the family's briefing packet [24 CFR 982.307(b)(3)]. The PHA may not disclose to the owner any confidential information provided by the family in response to a PHA request for documentation of domestic violence, dating violence, sexual assault, stalking, or human trafficking, except at the written request or with the written consent of the individual providing the documentation [see 24 CFR 5.2007(b)(4)].

9-I.B. REQUESTING TENANCY APPROVAL [Form HUD-52517] and 24 CFR 982.302]

After the family is issued a voucher, the family must locate an eligible unit, with an owner or landlord willing to participate in the voucher program. Once a family finds a suitable unit and the owner is willing to lease the unit under the program, the owner and the family must request the PHA to approve the assisted tenancy in the selected unit. The owner and the family must submit two documents to the PHA:

• Completed Request for Tenancy Approval (RFTA) – Form HUD-52517
• Copy of the proposed lease, including the HUD-prescribed Tenancy Addendum – Form

HUD-52641-A The RFTA contains important information about the rental unit selected by the family, including the unit address, number of bedrooms, structure type, year constructed, utilities included in the

rent, and the requested beginning date of the lease, necessary for the PHA to determine whether to approve the assisted tenancy in this unit. explanation for any difference between the prior rent and the proposed rent. of any member of the family, unless the PHA has granted a request for reasonable accommodation for a person with disabilities who is a member of the tenant household. For units constructed prior to 1978, owners must either 1) certify that the unit, common areas, and exterior have been found to be free of lead-based paint by a certified inspector; or 2) attach a lead-based paint disclosure statement. Both the RFTA and the proposed lease must be submitted no later than the expiration date stated on the voucher. [HCV GB p.8-15]. The must identify in the administrative plan whether the family will be permitted to submit more than one RTA at a time [24 CFR 982.54(d)(25)].

Because of the time sensitive nature of the tenancy approval process, the Authority will attempt to communicate with the owner and family by phone, or email. The Authority will use mail when the parties cannot be reached by phone, or email.

9-I.C. OWNER PARTICIPATION

The PHA does not formally approve an owner to participate in the HCV program. However, there are a number of criteria where the PHA may deny approval of an assisted tenancy based on past owner behavior, conflict of interest, or other owner-related issues. There are also criteria for which the PHA must disapprove an owner. No owner has a right to participate in the HCV program [24 CFR 982.306(e)] See Chapter 13 for a full discussion of owner qualification to participate in the HCV program.

9-I.D. ELIGIBLE UNITS

There are a number of criteria that a dwelling unit must meet in order to be eligible for assistance under the voucher program. Generally, a voucher-holder family may choose any available rental dwelling unit on the market in the PHA's jurisdiction. This includes the dwelling unit they are currently occupying. Ineligible Units [24 CFR 982.352(a)] The PHA may not assist a unit under the voucher program if the unit is a public housing or Indian housing unit; a unit receiving project-based assistance under section 8 of the 1937 Act (42 U.S.C. 1437f); nursing homes, board and care homes, or facilities providing continual psychiatric, medical, or nursing services; college or other school dormitories; units on the grounds of penal, reformatory, medical, mental, and similar public or private institutions; a unit occupied by its owner or by a person with any interest in the unit. PHA-Owned Units [24 CFR 982.352(b)] Owned units as defined by 24 CFR 982.4 may also be leased in the voucher program. In order for a PHA-owned unit to be leased under the voucher program, the unit must not be ineligible housing and the PHA must inform the family, both orally and in writing, that the family has the right to select any eligible unit available for lease and that the family is free to select a PHA- owned unit without any pressure or steering by the Authority. The Authority must obtain the services of an independent entity to perform certain functions as described in 24 CFR 982.352(b)(v)(A). HUD regulations permit, but do not generally require, the PHA to permit families to use voucher assistance in a number of special housing types in accordance with the specific requirements applicable to those programs. These special housing types include single room occupancy (SRO) housing, congregate housing, group home, shared housing, manufactured home space (where the family owns the manufactured home and leases only the space), cooperative housing and homeownership option. See Chapter 15 for specific information and policies on any of these housing types that the PHA has chosen to allow.

The regulations do require the PHA to permit use of any special housing type if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. Duplicative Assistance [24 CFR 982.352(c)] A family may not receive the benefit of HCV tenant-based assistance while receiving the benefit of any of the following forms of other housing subsidy, for the same unit or for a different unit:

• Public or Indian housing assistance;
• Other Section 8 assistance (including other tenant-based assistance);
• Assistance under former Section 23 of the United States Housing Act of 1937 (before

amendment by the Housing and Community Development Act of 1974);

• Section 101 rent supplements;
• Section 236 rental assistance payments;
• Tenant-based assistance under the HOME Program;
• Rental assistance payments under Section 521 of the Housing Act of 1949 (a program of the

Rural Development Administration);

• Any local or State rent subsidy;
• Section 202 supportive housing for the elderly;
• Section 811 supportive housing for persons with disabilities; (11) Section 202 projects for

non-elderly persons with disabilities (Section 162 assistance); or

• Any other duplicative federal, State, or local housing subsidy, as determined by HUD. For

this purpose, 'housing subsidy' does not include the housing component of a welfare payment, a social security payment received by the family, or a rent reduction because of a tax credit. Initial Inspection In order to be eligible, the dwelling unit must be in safe and habitable condition and pass applicable housing quality standards. See Chapter 8 for a full discussion of inspection standards, as well as the process for inspection at initial lease-up. Initial Inspection In order to be eligible, the dwelling unit must be in safe and habitable condition and pass applicable housing quality standards. See Chapter 8 for a full discussion of inspection standards, as well as the process for inspection at initial lease-up. Unit Size In order to be eligible, the dwelling unit must be appropriate for the number of persons in the household. A family must be allowed to lease an otherwise acceptable dwelling unit with fewer bedrooms than the number of bedrooms stated on the voucher issued to the family, provided the unit meets the applicable space requirements [24 CFR 5.703(d)(5)]. The family must be allowed to lease an otherwise acceptable dwelling unit with more bedrooms than the number of bedrooms

stated on the voucher issued to the family. See Chapter 5 for a full discussion of subsidy standards. Rent Reasonableness [24 CFR 982.305 and 24 CFR 982.507] In order to be eligible, the dwelling unit must have a reasonable rent. The rent must be reasonable in relation to comparable unassisted units in the area and must not be in excess of rents charged by the owner for comparable, unassisted units on the premises. See Chapter 8 for a full discussion of rent reasonableness and the rent reasonableness determination process. Rent Burden [24 CFR 982.508] Where a family is initially leasing a unit and the gross rent of the unit exceeds the applicable payment standard for the family, the family share cannot exceed 40 percent of the family's adjusted monthly income. The term "family share" refers to the amount the family pays toward rent and utilities. The gross rent for the unit minus the total housing assistance payment (HAP) for the unit equals the family share. See Chapter 6 for a discussion of calculation of gross rent, the use of payment standards, and calculation of family income, family share of rent and HAP.

9-I.E. LEASE AND TENANCY ADDENDUM

The family and the owner must execute a written dwelling lease agreement for the assisted unit. This written lease is a contract between the tenant family and the owner; the PHA is not a party to this contract. The tenant must have legal capacity to enter a lease under State and local law. 'Legal capacity' means that the tenant is bound by the terms of the lease and may enforce the terms of the lease against the owner [24 CFR 982.308(a)] Lease Form and Tenancy Addendum [24 CFR 982.308] If the owner uses a standard lease form for rental to unassisted tenants in the locality or the premises, the lease must be in such standard form. If the owner does not use a standard lease form for rental to unassisted tenants, the owner may use another form of lease. The HAP contract prescribed by HUD contains the owner's certification that if the owner uses a standard lease form for rental to unassisted tenants, the lease for the assisted tenants is in such standard form. All provisions in the HUD-required Tenancy Addendum must be added word-for-word to the owner's standard lease form. The Tenancy Addendum includes the HUD requirements for the tenancy. Because it is a part of the lease, the tenant shall have the right to enforce the Tenancy Addendum against the owner. If there is a conflict between the owner's lease and the Tenancy Addendum, the terms of the Tenancy Addendum shall prevail over any other provisions of the lease.

• The names of the owner and the tenant:

• The unit rented (address, apartment number, and any other information needed to identify the

contract unit)

• The term of the lease (initial term and any provisions for renewal)
• The amount of the monthly rent to owner
• A specification of what utilities and appliances are to be supplied by the owner, and what

utilities and appliances are to be supplied by the family

Term of Assisted Tenancy The initial term of the assisted dwelling lease must be for at least one year [24 CFR 982.309]. The initial lease term is also stated in the HAP contract. The HUD program regulations permit the PHA to approve a shorter initial lease term if certain conditions are met.

Separate Non-Lease Agreements between Owner and Tenant owner as approved by the PHA minus the PHA's housing assistance payments to the owner [24 CFR 982.451(b)(4)]. The owner may not charge the tenant extra amounts for items customarily included in rent in the locality, or provided at no additional cost to unsubsidized tenants in the premises [24 CFR 982.510(c)].

9-I.F. TENANCY APPROVAL [24 CFR 982.305]

After receiving the family's Request for Tenancy Approval, with proposed dwelling lease, the PHA must promptly notify the family and owner whether the assisted tenancy is approved. Prior to approving the assisted tenancy and execution of a HAP contract, the PHA must ensure that all required actions and determinations, discussed in Part I of this chapter have been completed. These actions include ensuring that the unit is eligible; the unit has been inspected by the PHA and meets housing quality standards; the lease offered by the owner is approvable and includes the required Tenancy Addendum; the rent to be charged by the owner for the unit must is reasonable; where the family is initially leasing a unit and the gross rent of the unit exceeds the applicable payment standard for the family, the share of rent to be paid by the family does not exceed 40 percent of the family's monthly adjusted income [24 CFR 982.305(a)]; the owner is an eligible owner, not disapproved by the PHA, with no conflicts of interest [24 CFR 982.306]; the family and the owner have executed the lease, including the Tenancy Addendum, and the lead- based paint disclosure information [24 CFR 982.305(b)].

9-I.G. HAP CONTRACT EXECUTION [24 CFR 982.305]

The HAP contract is a written agreement between the PHA and the owner of the dwelling unit. Under the HAP contract, the PHA agrees to make housing assistance payments to the owner on behalf of the family, and the owner agrees to comply with all program requirements as stated in the HAP contract. The HAP contract form is prescribed by HUD. If the PHA has given approval for the family of the assisted tenancy, the owner and the PHA must execute the HAP contract. The term of the HAP contract must be the same as the term of the lease [24 CFR 982.451(a)(2)]. The PHA is permitted to execute a HAP contract even if the funding currently available does not extend for the full term of the HAP contract. The PHA must make a best effort to ensure that the HAP contract is executed before the beginning of the lease term. Regardless, the HAP contract must be executed no later than 60 calendar days from the beginning of the lease term. Any HAP contract executed after the 60-day period is void, and the Authority may not pay any housing assistance payments to the owner, unless there are extenuating circumstances that prevent or prevented the Authority from meeting the 60-day deadline, then the Authority may submit to the HUD field office a request for an extension no later than two weeks after the 60-day deadline. The PHA may not pay any housing assistance payment to the owner until the HAP contract has been executed. If the HAP contract is executed during the period of 60 calendar days from the beginning of the lease term, the PHA will pay housing assistance payments after execution of the HAP contract (in accordance with the terms of the HAP contract), to cover the portion of the lease term before execution of the HAP contract (a maximum of 60 days). Any HAP contract executed after the 60-day period is void, and the PHA may not pay any housing assistance payment to the owner.

9-I.H. CHANGES IN LEASE OR RENT [24 CFR 982.308]

If the tenant and the owner agree to any changes in the lease, such changes must be in writing, and the owner must immediately give the PHA a copy of such changes. The lease, including any changes, must remain in accordance with the requirements of this chapter. Generally, PHA approval of tenancy and execution of a new HAP contract are not required for changes in the lease. However, under certain circumstances, the execution of a new lease and HAP contract are required. These circumstances include:

• Changes in lease requirements governing tenant or owner responsibilities for utilities or

appliances

• Changes in lease provisions governing the term of the lease
• The family moves to a new unit, even if the unit is in the same building or complex

In these cases, if the HCV assistance is to continue, the family must submit a new Request for Tenancy Approval (RTA) along with a new dwelling lease containing the proposed changes. A new tenancy must then be approved in accordance with this chapter. Where the owner is changing the amount of the rent to owner, the owner must notify the PHA at least 60 days before any such changes go into effect [24 CFR 982.308(g)(4)]. The PHA will agree to such an increase only if the amount of the rent to owner is considered reasonable according to the rent reasonableness standards discussed in Chapter 8. If the requested rent is not found to be reasonable, the owner must either reduce the requested rent increase, or terminate the tenancy in accordance with the terms of the lease. No rent increase is permitted during the initial term of the lease [24 CFR 982.309(a)(3)].

MOVING WITH CONTINUED ASSISTANCE AND PORTABILITY

INTRODUCTION Freedom of housing choice is a hallmark of the housing choice voucher (HCV) program. In general, HUD regulations impose few restrictions on where families may live or move with HCV assistance. This chapter sets forth HUD regulations and PHA policies governing moves within or outside the PHA's jurisdiction in two parts: Part I: Moving with Continued Assistance. This part covers the general rules that apply to all moves by a family assisted under the PHA's HCV program, whether the family moves to another unit within the PHA's jurisdiction or to a unit outside the PHA's jurisdiction under portability. Part II: Portability. This part covers the special rules that apply to moves by a family under portability, whether the family moves out of or into the PHA's jurisdiction. This part also covers the special responsibilities that the PHA has under portability regulations and procedures.

Part I: Moving With Continued Assistance

10-I.A. ALLOWABLE MOVES

HUD lists six regulatory conditions under which an assisted family is allowed to move to a new unit with continued assistance. Permission to move is subject to the restrictions set forth in section 10-I.B.

• The family has a right to terminate the lease on notice to the owner (for the owner's breach or

otherwise) and has given a notice of termination to the owner in accordance with the lease [24 CFR 982.354(b)(3)]. If the family terminates the lease on notice to the owner, the family must give the PHA a copy of the notice at the same time [24 CFR 982.354(d)(1)].

• The lease for the family's unit has been terminated by mutual agreement of the owner and the

family [24 CFR 982.354(b)(1)(ii)].

• The owner has given the family a notice to vacate, has commenced an action to evict the

family, or has obtained a court judgment or other process allowing the owner to evict the family [24 CFR 982.354(b)(2)]. The family must give the PHA a copy of any owner eviction notice [24 CFR 982.551(g)].

• The family or a member of the family is or has been the victim of domestic violence, dating

violence, sexual assault, stalking, or human trafficking, and the move is needed to protect the health or safety of the family or family member [see 24 CFR 982.354(b)(4)]. This condition applies even when the family has moved out of its unit in violation of the lease, with or without prior notification to the PHA, if the family or family member who is the victim reasonably believed that they were imminently threatened by harm from further violence if they remained in the unit [24 CFR 982.354(b)(4), 24 CFR 982.353(b)]. The PHA must adopt an emergency transfer plan as required by regulations at 24 CFR 5.2007(e).

• The PHA has terminated the HAP contract for the family's unit for the owner's breach [24

CFR 982.354(b)(1)(i)].

• The PHA determines that the family's current unit does not meet space standards because of

an increase in family size or a change in family composition. In such cases, the PHA must issue the family a new voucher, and the family and PHA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for the family, the PHA must terminate the HAP contract for the family's old unit in accordance with the HAP contract terms and must notify both the family and the owner of the termination. The HAP contract terminates at the end of the calendar month that follows the calendar month in which the PHA gives notice to the owner. [24 CFR 982.403(a) and (c)]

10-I.B. Family Moves Due To Unit Deficiencies

Units in Abatement [24 CFR 982.404(d)(3)]

An owner may not terminate the tenancy of a family due to the PHA withholding or abating HAP for housing quality standards deficiencies that are not repaired timely. During the period that assistance is abated, the family may terminate tenancy by notifying the owner and the PHA. If the family chooses to terminate or the date the family vacates the unit, whichever is earlier. The PHA must promptly issue the family its voucher to move.

10-I.C. RESTRICTIONS ON MOVES

A family's right to move is generally contingent upon the family's compliance with program requirements [24 CFR 982.1(b)(2)]. HUD specifies two conditions under which a PHA may deny a family permission to move and two ways in which a PHA may restrict moves by a family. Denial of Moves HUD regulations permit the PHA to deny a family permission to move under the following conditions: Insufficient Funding The PHA may deny a family permission to move either within or outside the PHA's jurisdiction if the PHA does not have sufficient funding for continued assistance [24 CFR 982.354(e)(1)]. However, Notice PIH 2016-09 significantly restricts the ability of PHAs to deny permission to

move due to insufficient funding and places further requirements on PHAs regarding moves denied due to lack of funding. The requirements found in this notice are mandatory.

not apply when the family or a member of the family is or has been the victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking, and the move is needed to protect the health or safety of the family or family member. (For the policy on documentation of abuse, see section 10-I.A.) In addition, the PHA may not establish a policy permitting moves only at reexamination [Notice PIH 2016-09].

10-I.D. MOVING PROCESS

Notification If a family wishes to move to a new unit, the family must notify the PHA and the owner before moving out of the old unit or terminating the lease on notice to the owner [24 CFR 982.354(d)(2)]. If the family wishes to move to a unit outside the PHA's jurisdiction under portability, the notice to the PHA must specify the area where the family wishes to move [24 CFR 982.354(d)(2)]. The notices must be in writing [24 CFR 982.5]. Approval

For families moving into or families approved to move out of the Authority's jurisdiction under portability, the Authority will follow the policies set forth in Part II of this chapter. Voucher Issuance and Briefing

Part Ii: Portability

10-II.A. OVERVIEW

Within the limitations of the regulations and this plan, a participant family or an applicant family that has been issued a voucher has the right to use tenant-based voucher assistance to lease a unit anywhere in the United States providing that the unit is located within the jurisdiction of a PHA administering a tenant-based voucher program [24 CFR 982.353(b)]. The process by which a family obtains a voucher from one PHA and uses it to lease a unit in the jurisdiction of another PHA is known as portability. The PHA that issues the voucher is called the initial PHA. The PHA that has jurisdiction in the area to which the family wants to move is called the receiving PHA. The receiving PHA has the option of administering the family's voucher for the initial PHA or absorbing the family into its own program. Under the first option, the receiving PHA provides all housing services for the family and bills the initial PHA for the family's housing assistance payments and the fees for administering the family's voucher. Under the second option, the receiving PHA pays for the family's assistance with its own program funds, and the initial PHA has no further relationship with the family. The initial PHA must contact the receiving PHA via email or other confirmed delivery method to determine whether the receiving PHA will administer or absorb the initial PHA's voucher. Based on the receiving PHA's response, the initial PHA must determine whether they will approve or deny the portability request [Notice PIH 2016-09]. PHAs commonly act as both the initial and receiving PHA because families may move into or out of their jurisdiction under portability. Each role involves different responsibilities. The PHA will follow the rules and policies in section 10-II.B when it is acting as the initial PHA for a family. It will follow the rules and policies in section 10-II.C when it is acting as the receiving PHA for a family. In administering portability, the initial PHA and the receiving PHA must comply with financial procedures required by HUD, including the use of HUD-required forms [24 CFR 982.355(e)(5)]. PHAs must also comply with billing and payment deadlines. HUD may reduce an administrative fee to an initial or receiving PHA if the PHA does not comply with HUD portability requirements [24 CFR 982.355(e)(7)].

10-II.B. INITIAL PHA ROLE

Allowable Moves under Portability A family may move with voucher assistance only to an area where there is at least one PHA administering a voucher program [24 CFR 982.353(b)]. If there is more than one PHA in the area, the initial PHA provides the family with the contact information for the receiving PHAs that serve the area, and the family selects the receiving PHA. The family must inform the initial PHA which receiving PHA it has selected. If the family prefers not to select the receiving PHA, the initial PHA will select the receiving PHA on behalf of the family [24 CFR 982.255(b)].

Applicant families that have been issued vouchers as well as participant families may qualify to lease a unit outside the PHA's jurisdiction under portability. HUD regulations and PHA policy determine whether a family qualifies. Applicant Families Under HUD regulations, most applicant families qualify to lease a unit outside the PHA's jurisdiction under portability. However, HUD gives the PHA discretion to deny a portability move by an applicant family for the same two reasons that it may deny any move by a participant family: insufficient funding and grounds for denial or termination of assistance. If a PHA intends to deny a family permission to move under portability due to insufficient funding, the PHA must notify HUD within 10 business days of the determination to deny the move [24 CFR 982.355(e)].

policies set forth here and in sections 10-I.A and 10-I.B of this chapter. The Authority will notify the family of its determination in accordance with the approval policy set forth in section 10-I.C of this chapter. Determining Income Eligibility Applicant Families An applicant family may lease a unit in a particular area under portability only if the family is income eligible for admission to the voucher program in that area [24 CFR 982.353(d)(1)]. The family must specify the area to which the family wishes to move [24 CFR 982.355(c)(1)]. The initial PHA is responsible for determining whether the family is income eligible in the area to which the family wishes to move [24 CFR 982.353(d)(1), 24 CFR 982.355(9)]. If the applicant family is not income eligible in that area, the PHA must inform the family that it may not move there and receive voucher assistance [Notice PIH 2016-09]. Participant Families The income eligibility of a participant family is not redetermined if the family moves to a new jurisdiction under portability [24 CFR 982.353(d)(2)]. Reexamination of Family Income and Composition No new reexamination of family income and composition is required for an applicant family.

provide any additional information about receiving PHAs in the area. The Authority will further inform the family that if the family prefers not to select the receiving PHA, the initial PHA will select the receiving PHA on behalf of the family. In this case, the Authority will not provide the family with information for all receiving PHAs in the area. The Authority will advise the family that they will be under the receiving PHA's policies and procedures, including screening, subsidy standards, voucher extension policies, and payment standards. Voucher Issuance and Term An applicant family has no right to portability until after the family has been issued a voucher [24 CFR 982.353(b)]. In issuing vouchers to applicant families, the PHA will follow the regulations and procedures set forth in Chapter 5.

Initial Notification to the Receiving PHA After approving a family's request to move under portability, the initial PHA must promptly notify the receiving PHA via email or other confirmed delivery method to expect the family [24 CFR 982.355(c)(3); 24 CFR 982.355(c)(7)]. The initial PHA must also advise the family how to contact and request assistance from the receiving PHA [24 CFR 982.355(c)(6)].

• Form HUD-52665, Family Portability Information, with Part I filled out

[Notice PIH 2016-09]

• A copy of the family's voucher [Notice PIH 2016-09]
• A copy of the family's most recent form HUD-50058, Family Report, or, if necessary in the

case of an applicant family, family and income information in a format similar to that of form HUD-50058 [24 CFR 982.355(c)(7), Notice PIH 2016-09]

• Copies of the income verifications backing up the form HUD-50058, including a copy of the

family's current EIV data [24 CFR 982.355(c)(7), Notice PIH 2016-09]

The PHA will notify the family in writing regarding any information provided to the receiving PHA [HCV GB, p. 13-3]. Initial Billing Deadline [Notice PIH 2016-09] The deadline for submission of initial billing is 90 days following the expiration date of the voucher issued to the family by the initial PHA. In cases where suspension of the voucher delays the initial billing submission, the receiving PHA must notify the initial PHA of delayed billing before the billing deadline and document the delay is due to the suspension. In this case, the initial PHA must extend the billing deadline by 30 days. If the initial PHA does not receive a billing notice by the deadline and does not intend to honor a late billing submission, it must notify the receiving PHA in writing. The initial PHA may report to HUD the receiving PHA's failure to comply with the deadline. If the initial PHA will honor the late billing, no action is required.

10-II.C. RECEIVING PHA ROLE

If a family has a right to lease a unit in the receiving PHA's jurisdiction under portability, the receiving PHA must provide assistance for the family [24 CFR 982.355(10)]. HUD may determine in certain instances that a PHA is not required to accept incoming portable families, such as a PHA in a declared disaster area. However, the PHA must have approval in writing from HUD before refusing any incoming portable families [24 CFR 982.355(b)]. Administration of the voucher must be in accordance with the receiving PHA's policies. This requirement also applies to policies of Moving to Work agencies. The receiving PHA procedures and preferences for selection among eligible applicants do not apply to the family, and the receiving PHA waiting list is not used [24 CFR 982.355(c)(10)]. The family's unit, or voucher, size is determined in accordance with the subsidy standards of the receiving PHA [24 CFR 982.355(c)(12)], and the receiving PHA's policies on extensions of the voucher term apply [24 CFR 982.355(c)(14)]. Responding to Initial PHA's Request [24 CFR 982.355(c)] The receiving PHA must respond via email or other confirmed delivery method to the initial PHA's inquiry to determine whether the family's voucher will be billed or absorbed [24 CFR 982.355(c)(3)]. If the receiving PHA informs the initial PHA that it will be absorbing the voucher, the receiving PHA cannot reverse its decision at a later date without consent of the initial PHA (24 CFR 982.355(c)(4).

When a family moves into the PHA's jurisdiction under portability, the family is responsible for promptly contacting the PHA and complying with the PHA's procedures for incoming portable families. The family's failure to comply may result in denial or termination of the receiving PHA's voucher [24 CFR 982.355(c)(8)]. If the voucher issued to the family by the initial PHA has expired, the receiving PHA must contact the initial PHA to determine if it will extend the voucher [24 CFR 982.355(c)(13)]. An informal hearing is not required when a voucher has expired without the family leasing a unit. If for any reason the receiving PHA refuses to process or provide assistance to a family under the portability procedures, the family must be given the opportunity for an informal review or hearing [Notice PIH 2016-09]. (For more on this topic, see later under "Denial or Termination of Assistance.") Briefing HUD allows the receiving PHA to require a briefing for an incoming portable family as long as the requirement does not unduly delay the family's search [Notice PIH 2016-09].

Timing of Voucher Issuance HUD expects the receiving PHA to issue the voucher within two weeks after receiving the family's paperwork from the initial PHA if the information is in order, the family has contacted the receiving PHA, and the family complies with the receiving PHA's procedures [Notice PIH 2016-09].

Voucher Suspensions [24 CFR 982.303, 24 CFR 982.355(c)(15)] If the family submits a request for tenancy approval during the term of the receiving PHA's voucher, the PHA must suspend the term of that voucher. The term of the voucher stops from the date that the family submits a request for PHA approval of the tenancy until the date the PHA

notifies the family in writing whether the request has been approved or denied [24 CFR 982.4(b)] (see Section 5-II.E). Notifying the Initial PHA The receiving PHA must promptly notify the initial PHA if the family has leased an eligible unit under the program or if the family fails to submit a request for tenancy approval for an eligible unit within the term of the receiving PHA's voucher [24 CFR 982.355(c)(16)]. The receiving PHA is required to use Part II of form HUD-52665, Family Portability Information, for this purpose [Notice PIH 2016-09]. (For more on this topic and the deadline for notification, see below under "Administering a Portable Family's Voucher.") If an incoming portable family ultimately decides not to lease in the jurisdiction of the receiving PHA but instead wishes to return to the initial PHA's jurisdiction or to search in another jurisdiction, the receiving PHA must refer the family back to the initial PHA. In such a case the voucher of record for the family is once again the voucher originally issued by the initial PHA. Any extension of search time provided by the receiving PHA's voucher is only valid for the family's search in the receiving PHA's jurisdiction [Notice PIH 2016-09]. Administering a Portable Family's Voucher Portability Billing [24 CFR 982.355(e)] To cover assistance for a portable family that was not absorbed, the receiving PHA bills the initial PHA for housing assistance payments and administrative fees. The amount of the housing assistance payment for a portable family in the receiving PHA's program is determined in the same manner as for other families in the receiving PHA's program. The receiving PHA may bill the initial PHA for the lesser of 80 percent of the initial PHA's ongoing administrative fee or 100 percent of the receiving PHA's ongoing administrative fee for each program unit under contract on the first day of the month for which the receiving PHA is billing the initial PHA under portability. If the administrative fees are prorated for the HCV program, the proration will apply to the amount of the administrative fee for which the receiving PHA may bill (i.e., the receiving PHA may bill for the lesser of 80 percent of the initial PHA's prorated ongoing administrative fee or 100 percent of the receiving PHA's ongoing administrative fee). If both PHAs agree, the PHAs may negotiate a different amount of reimbursement.

Initial Billing Deadline If a portable family's search for a unit is successful and the receiving PHA intends to administer the family's voucher, the receiving PHA must submit its initial billing notice (Part II of form HUD-52665) in time that the notice will be received no later than 90 days following the expiration date of the family's voucher issued by the initial PHA [Notice PIH 2016-09]. This deadline may be extended for 30 additional days if the delay is due to suspension of the

voucher's term (see Initial Billing Section). A copy of the family's form HUD-50058, Family Report, completed by the receiving PHA must be attached to the initial billing notice. The receiving PHA may send these documents by mail, fax, or email.

• A change in the HAP amount (because of a reexamination, a change in the applicable

payment standard, a move to another unit, etc.)

• An abatement or subsequent resumption of the HAP payments
• Termination of the HAP contract
• Payment of a damage/vacancy loss claim for the family
• Termination of the family from the program

The timing of the notice of the change in the billing amount should correspond with the notification to the owner and the family in order to provide the initial PHA with advance notice of the change. Under no circumstances should the notification be later than 10 business days following the effective date of the change in the billing amount. If the receiving PHA fails to send Form HUD-52665 within 10 days of effective date of billing changes, the initial PHA is not responsible for any increase prior to notification. If the change resulted in a decrease in the monthly billing amount, the initial PHA will offset future monthly payments until the difference is reconciled. Late Payments [Notice PIH 2016-09] If the initial PHA fails to make a monthly payment for a portable family by the fifth business day of the month, the receiving PHA must promptly notify the initial PHA in writing of the deficiency. The notice must identify the family, the amount of the billing payment, the date the

billing payment was due, and the date the billing payment was received (if it arrived late). The receiving PHA must send a copy of the notification to the Office of Public Housing (OPH) in the HUD area office with jurisdiction over the receiving PHA. If the initial PHA fails to correct the problem by the second month following the notification, the receiving PHA may request by memorandum to the director of the OPH with jurisdiction over the receiving PHA that HUD transfer the unit in question. A copy of the initial notification and any subsequent correspondence between the PHAs on the matter must be attached. The receiving PHA must send a copy of the memorandum to the initial PHA. If the OPH decides to grant the transfer, the billing arrangement on behalf of the family ceases with the transfer, but the initial PHA is still responsible for any outstanding payments due to the receiving PHA. Overpayments [Notice PIH 2016-09] In all cases where the receiving PHA has received billing payments for billing arrangements no longer in effect, the receiving PHA is responsible for returning the full amount of the overpayment (including the portion provided for administrative fees) to the initial PHA. In the event that HUD determines billing payments have continued for at least three months because the receiving PHA failed to notify the initial PHA that the billing arrangement was terminated, the receiving PHA must take the following steps:

• Return the full amount of the overpayment, including the portion provided for administrative

fees, to the initial PHA.

• Once full payment has been returned, notify the Office of Public Housing in the HUD area

office with jurisdiction over the receiving PHA of the date and the amount of reimbursement to the initial PHA. At HUD's discretion, the receiving PHA will be subject to the sanctions spelled out in Notice PIH 2016-09.

Denial or Termination of Assistance At any time, the receiving PHA may make a determination to deny or terminate assistance to a portable family for family action or inaction [24 CFR 982.355(c)(17)]. In the case of a termination, the PHA should provide adequate notice of the effective date to the initial PHA to avoid having to return a payment. In no event should the receiving PHA fail to notify the initial PHA later than 10 business days following the effective date of the termination of the billing arrangement [HUD-52665; Notice PIH 2016-09].

Absorbing a Portable Family The receiving PHA may absorb an incoming portable family into its own program when the PHA executes a HAP contract on behalf of the family or at any time thereafter providing that the PHA has funding available under its annual contributions contract (ACC) [24 CFR 982.355(d)(1), Notice PIH 2016-09]. If the receiving PHA absorbs a family from the point of admission, the admission will be counted against the income targeting obligation of the receiving PHA [24 CFR 982.201(b)(2)(vii)]. If the receiving PHA absorbs a family after providing assistance for the family under a billing arrangement with the initial PHA, the receiving PHA must send an updated form HUD-52665 to the initial PHA no later than 10 business days following the effective date of the termination of the billing arrangement [Notice PIH 2016-09].

REEXAMINATIONS

INTRODUCTION This chapter is applicable until the Authority's HOTMA 102/104 compliance date. After this date, the Authority will follow policies as outlined in Chapter 11.B. The Authority is required to reexamine each family's income and composition at least annually, and to adjust the family's level of assistance accordingly. Interim reexaminations are also needed in certain situations. This chapter discusses both annual and interim reexaminations, and the recalculation of family share and subsidy that occurs as a result. HUD regulations and Authority policies concerning reexaminations are presented in three parts: Part I: Annual Reexaminations. This part discusses the process for conducting annual reexaminations. Part II: Interim Reexaminations. This part details the requirements for families to report changes in family income and composition between annual reexaminations. Part III: Recalculating Family Share and Subsidy Amount. This part discusses the recalculation of family share and subsidy amounts based on the results of annual and interim reexaminations. Policies governing reasonable accommodation, family privacy, required family cooperation, and program abuse, as described elsewhere in this plan, apply to both annual and interim reexaminations.

Part I: Annual Reexaminations [24 Cfr 982.516]

11-I.A. OVERVIEW

The Authority must conduct a reexamination of family income and composition at least annually. This includes gathering and verifying current information about family composition, income, and expenses. Based on this updated information, the family's income and rent must be recalculated. This part discusses the schedule for annual reexaminations, the information to be collected and verified, and annual reexamination effective dates. PHAs also have the option of using a Safe Harbor income verification from another federal means-tested program to verify gross annual income. Chapter 7 contains the Authority's policies related to use of Safe Harbor income verifications.

11-I.B. STREAMLINED ANNUAL REEXAMINATIONS [24 CFR 982.516(b);

New HCV GB, Reexaminations] HUD permits PHAs to streamline the income determination process for family members with fixed sources of income. While third-party verification of all income sources must be obtained during the intake process and every three years thereafter, in the intervening years the Authority may determine income from fixed sources by applying a verified cost of living adjustment (COLA) or rate of interest. The Authority may, however, obtain third-party verification of all

Reexaminations

income, regardless of the source. Further, upon request of the family, the Authority must perform third-party verification of all income sources. Fixed sources of income include Social Security and SSI benefits, pensions, annuities, disability or death benefits, and other sources of income subject to a COLA or rate of interest. The determination of fixed income may be streamlined even if the family also receives income from other non-fixed sources. Two streamlining options are available, depending upon the percentage of the family's income that is received from fixed sources. If at least 90 percent of the family's income is from fixed sources, the Authority may streamline the verification of fixed income but is not required to verify non-fixed income amounts. If the family receives less than 90 percent of its income from fixed sources, the Authority may streamline the verification of fixed income and must verify non-fixed income annually.

11-I.C. SCHEDULING ANNUAL REEXAMINATIONS

The Authority must establish a policy to ensure that the annual reexamination for each family is completed within a 12-month period and may require reexaminations more frequently [HCV GB p. 12-1].

Reexaminations

Notification of and Participation in the Annual Reexamination Process The Authority is required to obtain the information needed to conduct annual reexaminations. How that information will be collected is left to the discretion of the Authority. However, PHAs should give tenants who were not provided the opportunity the option to complete Form HUD- 92006 at this time [Notice PIH 2009-36].

• Electronic methods through software platforms such as Rent Café Portal; or
• Mail Reexamination; or
• In-person interview; or
• Phone interview

Notification of annual reexamination will be sent electronically or by first-class mail and will contain the pertinent information required for the annual reexamination process. In addition, it will inform the family of the information and documentation required. If the reexamination is scheduled in-person and if the family is unable to attend a scheduled interview, the family should contact the Authority in advance of the interview to schedule a new appointment. If a family does not attend the scheduled interview or complete the online reexamination by set date, the Authority will send a second notification with a new online due date or interview date and appointment time. If a family fails to attend two scheduled interviews or fails to complete two scheduled online processes without Authority approval, or if the electronic notice is undeliverable or notice is returned by the post office with no forwarding address, a notice of termination (see Chapter 12) will be sent to the family's address of record, and to any alternate address provided in the family's file. An advocate, interpreter, or other assistant may assist the family in the interview process. The family and the Authority must execute a certification attesting to the role and the assistance provided by any such third party.

11-I.D. CONDUCTING ANNUAL REEXAMINATIONS

As part of the annual reexamination process, families are required to provide updated information to the Authority regarding the family's income, expenses, and composition [24 CFR 982.551(b)].

Reexaminations

Families will be asked to bring/provide all required information (as described in the reexamination notice). The required information will include a Authority -designated reexamination online workflow or packet as well as supporting documents or forms related to the family's income, expenses, and family composition. Any required documents or information that the family is unable to provide at the time of the recertification must be provided within ten (10) business days. If the family is unable to obtain the information or materials within the required time frame, the family may request an extension. If the family does not provide the required documents or information within the required time period (plus any extensions), the family will be sent a notice of termination (See Chapter 12). Additionally, HUD recommends that at annual reexaminations PHAs ask whether the tenant, or any member of the tenant's household, is subject to a lifetime sex offender registration requirement in any state [Notice PIH 2012-28].

• Legal identity
• Age
• Social security numbers
• A person's disability status
• Citizenship or immigration status

If adding a new family member to the unit causes overcrowding according to the housing quality standards (see Chapter 8), the Authority must issue the family a new voucher, and the family must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the Authority must terminate the HAP contract in accordance with its terms [24 CFR 982.403].

Reexaminations

11-I.E. DETERMINING ONGOING ELIGIBILITY OF CERTAIN STUDENTS

[24 CFR 982.552(b)(5)] Section 327 of Public Law 109-115 established restrictions on the ongoing eligibility of certain students (both part- and full-time) who are enrolled in institutions of higher education. If a student enrolled in an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the student's eligibility must be reexamined along with the income eligibility of the student's parents on an annual basis. In these cases, both the student and the student's parents must be income eligible for the student to continue to receive HCV assistance. If, however, a student in these circumstances is determined independent from their parents or is considered a vulnerable youth in accordance with Authority policy, the income of the student's parents will not be considered in determining the student's ongoing eligibility. Students who reside with parents in an HCV assisted unit are not subject to this provision. It is limited to students who are receiving assistance on their own, separately from their parents.

11-I.F. EFFECTIVE DATES

The Authority must establish policies concerning the effective date of changes that result from an annual reexamination [24 CFR 982.516].

Reexaminations

will be determined by the Authority, but will always allow for the 30-day notice period. If the family causes a delay in processing the annual reexamination, increases in the family share of the rent will be applied retroactively, to the scheduled effective date of the annual reexamination. The family will be responsible for any overpaid subsidy and may be offered a repayment agreement in accordance with the policies in Chapter 16. In general, a decrease in the family share of the rent that results from an annual reexamination will take effect on the family's anniversary date. If a family moves to a new unit, the decrease will take effect on the effective date of the new lease and HAP contract. If the Authority chooses to schedule an annual reexamination for completion prior to the family's anniversary date for administrative purposes, the effective date will be determined by the Authority. If the family causes a delay in processing the annual reexamination, decreases in the family share of the rent will be applied prospectively, from the first day of the month following completion of the reexamination processing. Delays in reexamination processing are considered to be caused by the family if the family fails to provide information requested by the Authority by the date specified, and this delay prevents the Authority from completing the reexamination as scheduled.

Reexaminations

Part Ii: Interim Reexaminations [24 Cfr 982.516]

11-II.A. OVERVIEW

Family circumstances may change between annual reexaminations. HUD and Authority policies dictate what kinds of information about changes in family circumstances must be reported, and under what circumstances the Authority must process interim reexaminations to reflect those changes. HUD regulations also permit the Authority to conduct interim reexaminations of income or family composition at any time. When an interim reexamination is conducted, only those factors that have changed are verified and adjusted [HCV GB, p. 12-10]. In addition to specifying what information the family must report, HUD regulations permit the family to request an interim determination if other aspects of the family's income or composition changes. The Authority must complete the interim reexamination within a reasonable time after the family's request. This part includes HUD and Authority policies describing what changes families are required to report, what changes families may choose to report, and how the Authority will process both Authority and family-initiated interim reexaminations.

11-II.B. CHANGES IN FAMILY AND HOUSEHOLD COMPOSITION

Reporting The family is required to report all changes in family composition. The Authority must adopt policies prescribing when and under what conditions the family must report changes in income and family composition. However, due to family obligations under the program, the Authority has limited discretion in this area.

Reexaminations

New Family and Household Members Requiring Approval With the exception of children who join the family as a result of birth, adoption, or court- awarded custody, a family must request Authority approval to add a new family member [24 CFR 982.551(h)(2)] or other household member (live-in aide or foster child) [24 CFR 982.551(h)(4)]. Although the Authority must verify aspects of program eligibility when any new family member is added, the Streamlining Final Rule removed the requirement that PHAs conduct a reexamination of income whenever a new family member is added. The Authority may state in policy that an income reexamination will be conducted. If a change in family size causes a violation of Housing Quality (HQS) space standards (see Chapter 8), the Authority must issue the family a new voucher, and the family and Authority must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the Authority must terminate the family's HAP contract in accordance with its terms [24 CFR 982.403].

Reexaminations

Departure of a Family or Household Member Families must promptly notify the Authority if any household member no longer lives in the unit [24 CFR 982.551(h)(3)]. Because household members are considered when determining the family unit (voucher) size [24 CFR 982.402], the Authority also needs to know when any live-in aide, foster child, or foster adult ceases to reside in the unit. The Authority must process an interim for all decreases in adjusted income when a family member permanently moves out of the unit.

11-II.C. CHANGES AFFECTING INCOME OR EXPENSES

Overview Interim reexaminations for changes in income or expenses may be scheduled either because the Authority has reason to believe that changes in income or expenses may have occurred, or because the family reports a change. Authority Initiated Interim Reexaminations Authority initiated interim reexaminations are those that are scheduled based on circumstances or criteria defined by the Authority. They are not scheduled because of changes reported by the family.

Reexaminations

If the family has reported zero income, the Authority will conduct an interim reexamination every 3 months as long as the family continues to report that they have no income. If at the time of the annual reexamination, it is not feasible to anticipate a level of income for the next 12 months (e.g. seasonal or cyclic income), the Authority will schedule an interim reexamination to coincide with the end of the period for which it is feasible to project income. If at the time of the annual reexamination, tenant declarations were used on a provisional basis due to the lack of third-party verification, and third-party verification becomes available, the Authority will conduct an interim reexamination. The Authority may conduct an interim reexamination at any time in order to correct an error in a previous reexamination, or to investigate a tenant fraud complaint. Family-Initiated Interim Reexaminations The Authority must adopt policies prescribing when and under what conditions the family must report changes in family income or expenses [24 CFR 982.516(c)]. In addition, HUD regulations require that the family be permitted to obtain an interim reexamination any time the family has experienced a change in circumstances since the last determination [24 CFR 982.516(b)(2)]. Required Reporting HUD regulations give the Authority the freedom to determine the circumstances under which families will be required to report changes affecting income.

Reexaminations

If a family reports a change that it was not required to report and that would result in a decrease in the family share of rent, the Authority will conduct an interim reexamination. See Section 11-II.D. for effective dates. Families may report changes in income or expenses at any time.

11-II.D. PROCESSING THE INTERIM REEXAMINATION

Method of Reporting

Reexaminations

Generally, the family will not be required to attend an interview for an interim reexamination. However, if the Authority determines that an interview is warranted, the family may be required to attend.

Reexaminations

Part Iii: Recalculating Family Share And Subsidy Amount

11-III.A. OVERVIEW

After gathering and verifying required information for an annual or interim reexamination, the Authority must recalculate the family share of the rent and the subsidy amount and notify the family and owner of the changes [24 CFR 982.516(d)(2), HCV 12-6 and 12-10]. While the basic policies that govern these calculations are provided in Chapter 6, this part lays out policies that affect these calculations during a reexamination.

11-III.B. CHANGES IN PAYMENT STANDARDS AND UTILITY ALLOWANCES

In order to calculate the family share of the rent and HAP amount correctly, changes in payment standards, subsidy standards, or utility allowances may need to be updated and included in the Authority's calculations. Specific policies governing how subsidy standards, payment standards, and utility allowances are applied are discussed below. Payment Standards [24 CFR 982.505] The family share of the rent and HAP calculations must use the correct payment standard for the family, taking into consideration the family unit size, the size of unit, and the area in which the unit is located [HCV GB, p. 12-5]. See Chapter 6 for information on how to select the appropriate payment standard. When the Authority changes its payment standards or the family's situation changes, new payment standards are applied at the following times:

• If the Authority's payment standard amount changes during the term of the HAP contract, the

date on which the new standard is applied depends on whether the standard has increased or decreased: - If the payment standard amount has increased, the increased payment standard will be applied at the first annual reexamination following the effective date of the increase in the payment standard. - If the payment standard amount has decreased, during the term of a HAP contract, the Authority is not required to reduce the payment standard as the HAP contract remains in effect. At the family's second annual reexamination, the Authority may, but is not required to, apply the decreased payment standard or may gradually implement the reduced payment standard (See Chapter 6 for the Authority's policy on decreases in the payment standard).

• If the family moves to a new unit, or a new HAP contract is executed due to changes in the

lease (even if the family remains in place) the current payment standard applicable to the family will be used when the new HAP contract is processed.

Reexaminations

Subsidy Standards [24 CFR 982.505(c)(4)] If there is a change in the family unit size that would apply to a family during the HAP contract term, either due to a change in family composition, or a change in the Authority's subsidy standards (see Chapter 5), the new family unit size must be used to determine the payment standard amount for the family at the family's first annual reexamination following the change in family unit size. Utility Allowances [24 CFR 982.517(d)] The family share of the rent and HAP calculations must reflect any changes in the family's utility arrangement with the owner, or in the Authority's utility allowance schedule [HCV GB, p. 12-5]. Chapter 16 discusses how utility allowance schedules are established. When there are changes in the utility arrangement with the owner, the Authority must use the utility allowances in effect at the time the new lease and HAP contract are executed. At reexamination, the Authority must use the Authority current utility allowance schedule [HCV GB, p. 18-8].

11-III.C. NOTIFICATION OF NEW FAMILY SHARE AND HAP AMOUNT

The Authority must notify the owner and family of any changes in the amount of the HAP payment [HUD-52641, HAP Contract]. The notice must include the following information [HCV GB, p. 12-6]: The amount and effective date of the new HAP payment The amount and effective date of the new family share of the rent The amount and effective date of the new tenant rent to owner The family must be given an opportunity for an informal hearing regarding the Authority's determination of their annual or adjusted income, and the use of such income to compute the housing assistance payment [24 CFR 982.555(a)(1)(i)] (see Chapter 16).

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11-III.D. DISCREPANCIES

During an annual or interim reexamination, the Authority may discover that information previously reported by the family was in error, or that the family intentionally misrepresented information. In addition, the Authority may discover errors made by the Authority. When errors resulting in the overpayment or underpayment of subsidy are discovered, corrections will be made in accordance with the policies in Chapter 13.

Reexaminations

REEXAMINATIONS UNDER HOTMA 102/104

INTRODUCTION This chapter is applicable upon the PHA's HOTMA 102/104 compliance date. Prior to this date, the PHA will follow policies as outlined in Chapter 11.A. The PHA is required to reexamine each family's income and composition at least annually, and to adjust the family's level of assistance accordingly. Interim reexaminations are also needed in certain situations. This chapter discusses both annual and interim reexaminations, and the recalculation of family share and subsidy that occurs as a result. HUD regulations and PHA policies concerning reexaminations are presented in three parts: Part I: Annual Reexaminations. This part discusses the process for conducting annual reexaminations. Part II: Interim Reexaminations. This part details the requirements for families to report changes in family income and composition between annual reexaminations. Part III: Recalculating Family Share and Subsidy Amount. This part discusses the recalculation of family share and subsidy amounts based on the results of annual and interim reexaminations. Part IV: Non-Interim Reexamination Transaction. This part describes transactions that do not entail changes to the family's adjusted income. Policies governing reasonable accommodation, family privacy, required family cooperation, and program abuse, as described elsewhere in this plan, apply to both annual and interim reexaminations.

Part I: Annual Reexaminations [24 Cfr 982.516]

11-I.A. OVERVIEW

The PHA must conduct a reexamination of family income and composition at least annually. This includes gathering and verifying current information about family composition, income, and expenses. Based on this updated information, the family's income and rent must be recalculated. This part discusses the schedule for annual reexaminations, the information to be collected and verified, and annual reexamination effective dates. Unlike when performing an interim reexamination or at intake, at annual reexamination, the PHA must determine the income of the family for the previous 12-month period, except where the PHA uses a streamlined income determination. Income from assets, however, is always anticipated, irrespective of the income examination type [Notice PIH 2023-27]. PHAs also have the option of using a Safe Harbor income verification from another federal means-tested program to verify gross annual income. Chapter 7 contains the PHA's policies related to streamlined income determinations and the use of Safe Harbor income verifications.

11-I.B. Scheduling Annual Reexaminations

Reexaminations

The PHA must establish a policy to ensure that the annual reexamination for each family is completed within a 12-month period and may require reexaminations more frequently [HCV GB p. 12-1].

• Electronic methods through software platforms such as Rent Café Portal; or
• Mail Reexamination; or
• In-person interview; or
• Phone interview

Notification of annual reexamination will be sent electronically or by first-class mail and will contain the pertinent information required for the annual reexamination process. In addition, it will inform the family of the information and documentation required. If the reexamination is scheduled in-person and if the family is unable to attend a scheduled interview, the family should contact the Authority in advance of the interview to schedule a new appointment. If a family does not attend the scheduled interview or complete the online reexamination by set date, the Authority will send a second notification with a new online due date or interview date and appointment time. If a family fails to attend two scheduled interviews or fails to complete two scheduled online processes without Authority approval, or if the electronic notice is undeliverable or notice is returned by the post office with no forwarding address, a notice of termination (see Chapter 12) will be sent to the family's address of record, and to any alternate address provided in the family's file.

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An advocate, interpreter, or other assistant may assist the family in the interview process. The family and the Authority must execute a certification attesting to the role and the assistance provided by any such third party.

11-I.C. CONDUCTING ANNUAL REEXAMINATIONS

As part of the annual reexamination process, families are required to provide updated information to the PHA regarding the family's income, expenses, and composition [24 CFR 982.551(b)].

Reexaminations

The information provided by the family generally must be verified in accordance with the policies in Chapter 7. Unless the family reports a change, or the PHA has reason to believe a change has occurred in information previously reported by the family, certain types of information that are verified at admission typically do not need to be re-verified on an annual basis. These include:

• Legal identity
• Age
• Social security numbers
• A person's disability status
• Citizenship or immigration status

If adding a new family member to the unit causes overcrowding according to the housing quality standards (see Chapter 8), the PHA must issue the family a new voucher, and the family must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the PHA must terminate the HAP contract in accordance with its terms [24 CFR 982.403].

11-I.D. DETERMINING ONGOING ELIGIBILITY OF CERTAIN STUDENTS

[24 CFR 982.552(b)(5)] Section 327 of Public Law 109-115 established restrictions on the ongoing eligibility of certain students (both part- and full-time) who are enrolled in institutions of higher education. If a student enrolled in an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the student's eligibility must be reexamined along with the income eligibility of the student's parents on an annual basis. In these cases, both the student and the student's parents must be income eligible for the student to continue to receive HCV assistance. If, however, a student in these circumstances is determined independent from their parents or is considered a vulnerable youth in accordance with PHA policy, the income of the student's parents will not be considered in determining the student's ongoing eligibility. Students who reside with parents in an HCV assisted unit are not subject to this provision. It is limited to students who are receiving assistance on their own, separately from their parents.

Reexaminations

If the student continues to be income eligible based on their own income and the income of their parents (if applicable), the PHA will process a reexamination in accordance with the policies in this chapter.

11-I.E. CALCULATING ANNUAL INCOME AT ANNUAL REEXAMINATION [24 CFR

5.609(c)(2) and Notice PIH 2023-27] The PHA must determine the income of the family for the previous 12-month period and use this amount as the family income for annual reexaminations, except where the PHA uses a streamlined income determination as indicated in Chapter 7 of this policy. The PHA may also use Safe Harbor income determinations dated within the last 12 months from a means-tested federal public assistance program at annual reexamination as outlined in Chapter 7 of this policy. Except when using streamlined or Safe Harbor income determinations, in determining the income of the family for the previous 12-month period, any change of income since the family's last annual reexamination, including those that did not meet the threshold to process an interim reexamination in accordance with PHA policies and 24 CFR 5.657(c) or 960.257(b) must be considered. Income from assets is always anticipated, irrespective of the income examination type. A change in income may be a loss of income or the addition of a new source of income. Changing to a different employer in the prior year does not necessarily constitute a change if the income earned from either employer is substantially the same. The PHA should look at the entirety of the family's unearned income and earned income from the prior year in which earned income may have been one constant job or many different jobs that start and stop. Cost of Living Adjustments (COLA) to Social Security income and Social Security disability income are always considered changes to income because the COLA is an adjustment that automatically occurs annually by law. See Chapter 6 for PHA policies on when the COLA is applied and Chapter 7 on streamlined determination of income for inflationary adjustments. Notice PIH 2023-27 lists the following steps to calculate both earned and unearned income at annual reexamination. Step 1: The PHA determines annual income for the previous 12-month period by reviewing the following information:

• The EIV Income Report pulled within 120 days of the effective date of the annual

reexamination;

• The income reported on the most recent HUD–50058; and
• The amount of prior-year income reported by the family on the PHA's annual reexamination

paperwork. Step 2: The PHA takes into consideration any interim reexamination of family income completed since the last annual reexamination.

• If there was an interim reexamination performed within the last reexamination cycle and

there are no additional changes, the PHA must use the annual income from the interim to determine the family's total annual income. The PHA may use verification obtained from the interim for this step.

Reexaminations

• If the PHA did not perform an interim or there have been changes since the last

reexamination, the PHA moves to Step 3. Step 3: If there were changes in annual income not processed by the PHA since the last reexamination, the PHA must use current income. The family will be required to report their income for the prior year and whether there have been permanent changes. If there are no reported changes to an income source, the PHA may use documentation of prior- year income to calculate the annual income. For example, the PHA may use the following documentation:

• EIV + self-certification (wages, Supplemental Security Income (SSI), Social Security, and

unemployment)

• Current written third-party verification from the source verifying prior-year income that is

dated within 120 days of receipt by the PHA, for example: - Year-end statements - Paystub with year-to-date amounts - Tax forms (Form 1040, W2, 1099, etc.) If there are reported changes by the family or the PHA notes discrepancies between EIV and what the family reports, the PHA must follow the verification hierarchy (described in Chapter 7) to document and verify income.

11-I.F. EFFECTIVE DATES

The PHA must establish policies concerning the effective date of changes that result from an annual reexamination [24 CFR 982.516].

Reexaminations

If the Authority chooses to schedule an annual reexamination for completion prior to the family's anniversary date for administrative purposes, the effective date will be determined by the Authority, but will always allow for the 30-day notice period. If the family causes a delay in processing the annual reexamination, increases in the family share of the rent will be applied retroactively, to the scheduled effective date of the annual reexamination. The family will be responsible for any overpaid subsidy and may be offered a repayment agreement in accordance with the policies in Chapter 16. In general, a decrease in the family share of the rent that results from an annual reexamination will take effect on the family's anniversary date. If a family moves to a new unit, the decrease will take effect on the effective date of the new lease and HAP contract. If the Authority chooses to schedule an annual reexamination for completion prior to the family's anniversary date for administrative purposes, the effective date will be determined by the Authority. If the family causes a delay in processing the annual reexamination, decreases in the family share of the rent will be applied prospectively, from the first day of the month following completion of the reexamination processing. Delays in reexamination processing are considered to be caused by the family if the family fails to provide information requested by the Authority by the date specified, and this delay prevents the Authority from completing the reexamination as scheduled.

Reexaminations

PART II: INTERIM REEXAMINATIONS [24 CFR 982.516; Notice PIH 2023-27]

11-II.A. OVERVIEW

Family circumstances may change between annual reexaminations. HUD and PHA policies dictate what kinds of information about changes in family circumstances must be reported, and under what circumstances the PHA must process interim reexaminations to reflect those changes. A family may request an interim determination of family income or composition because of any changes since the last determination. The PHA must conduct any interim reexamination within a reasonable period of time after the family request or when the PHA becomes aware of a change in the family's adjusted income that must be processed in accordance with HUD regulations. What qualifies as a "reasonable time" may vary based on the amount of time it takes to verify information, but the PHA generally should conduct the interim reexamination not longer than 30 days after the PHA becomes aware of changes in income. Notice PIH 2023-27 changes the conditions under which interim reexaminations must be conducted, codifies when interim reexaminations should be processed and made effective, and requires related changes for annual reexaminations and streamlined income determinations. When the PHA determines that an interim reexamination of income is necessary, they must ask the family to report changes in all aspects of adjusted income.

11-II.B. CHANGES IN FAMILY AND HOUSEHOLD COMPOSITION

Reporting PHAs must require families to report household composition changes; however, PHAs determine the timeframe in which reporting happens [Notice PIH 2023-27]. The PHA must adopt policies prescribing when and under what conditions the family must report changes in income and family composition [24 CFR 960.257(b)(5)].

Reexaminations

If a change in family size causes a violation of space standards (see Chapter 8), the PHA must issue the family a new voucher, and the family and PHA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the PHA must terminate the family's HAP contract in accordance with its terms [24 CFR 982.403].

Reexaminations

family unit size must be used to determine the payment standard for the family beginning at the family's first regular reexamination following the change in family unit size. Changes effective 12/3/24 and later: Irrespective of any increase or decrease in the payment standard, if the family unit size increases or decreases during the HAP contract term, the new family unit size may be used to determine the payment standard immediately or at the family's first regular reexamination following the change in family unit size.

11-II.C. CHANGES AFFECTING INCOME OR EXPENSES

Overview Interim reexaminations for changes in income or expenses may be scheduled either because the PHA has reason to believe that changes in income or expenses may have occurred, or because the family reports a change. The PHA must estimate the income of the family for the upcoming 12-month period to determine family income for an interim reexamination [24 CFR 5.609(c)(1)]. Policies for projecting income are found in Chapter 6. Interim Decreases [24 CFR 982.516(c)(2) and Notice PIH 2023-27] A family may request an interim determination of family income for any change since the last determination. However, the PHA may decline to conduct an interim reexamination if the PHA estimates the family's adjusted income will decrease by an amount that is less than 10 percent of the family's adjusted income. The PHA may set a lower threshold in PHA policy such as performing an interim for any decreases in adjusted income, although HUD prohibits the PHA from setting a dollar-figure threshold. However, while the PHA has some discretion, HUD requires that the PHA perform an interim reexamination for a decrease in adjusted income of any amount in two circumstances:

• When there is a decrease in family size attributed to the death of a family member; or
• When a family member permanently moves out of the assisted unit during the period since

the family's last reexamination. In the above circumstances, the PHA must perform an interim reexamination for any decrease in adjusted income. If the net effect of the changes in adjusted income due to a decrease in family size results in no change or an increase in annual adjusted income, then PHA must process the removal of the household member(s) as a non-interim reexamination transaction without making changes to the family's annual adjusted income.

Reexaminations

Interim Increases [24 CFR 982.516(c)(3) and Notice PIH 2023-27] Increases Less than 10 Percent PHAs must not process interim reexaminations for income increases that result in less than a 10 percent increase in annual adjusted income. Increases 10 Percent or Greater PHAs must conduct an interim reexamination of family income when the PHA becomes aware that the family's adjusted income has changed by an amount that the PHA estimates will result in an increase of 10 percent or more in adjusted income, with the following exceptions:

• PHAs may not consider any increases in earned income when estimating or calculating

whether the family's adjusted income has increased, unless the family has previously received an interim reduction during the same reexamination cycle; and

• PHAs may choose not to conduct an interim reexamination during the last three months of a

certification period if a family reports an increase in income within three months of the next annual reexamination effective date. When the family previously received an interim reexamination for a decrease to adjusted income during the same annual reexamination cycle, a PHA has the discretion whether to consider a subsequent increase in earned income.

Reexaminations

Cumulative Increases [Notice PIH 2023-27] A series of smaller reported increases in adjusted income may cumulatively meet or exceed the 10-percent increase threshold, at which point the PHA must conduct an interim reexamination in accordance with PHA policy. Family Reporting The PHA must adopt policies consistent with HUD regulations prescribing when and under what conditions the family must report a change in family income or composition [24 CFR 982.516(d)]. PHA policy may require families to report only changes that the family estimates meet the threshold for an interim reexamination or the PHA may establish policies requiring that families report all changes in income and household composition, and the PHA will subsequently determine if the change requires an interim reexamination [Notice PIH 2023-27]. When the PHA determines that an interim reexamination of income is necessary, they must ask the family to report changes in all aspects of adjusted income. For example, if the family is reporting a decrease in adjusted income that is more than 10 percent, but the family also had a change in assets that would result in a change in income, the change in assets must also be reviewed [Notice PIH 2023-27].

Reexaminations

Generally, the family will not be required to attend an interview for an interim reexamination. However, if the Authority determines that an interview is warranted, the family may be required to attend.

11-II.D. EFFECTIVE DATES [24 CFR 982.516(e) and Notice 2023-27]

Changes Reported Timely [Notice PIH 2023-27] If the family reports a change in family income or composition timely in accordance with PHA policies:

• For rent increases, the PHA must provide the family with 30 days advance written notice.

The rent increase is effective the first of the month after the end of that 30-day notice period.

• Rent decreases are effective on the first of the month after the date of the actual change

leading to the interim reexamination of family income. This means the decrease will be applied retroactively. Changes Not Reported Timely [Notice PIH 2023-27] If the family failed to report a change in family income or composition timely in accordance with PHA policies:

• For rent increases, the PHA must implement any resulting rent increases retroactively to the

first of the month following the date of the change leading to the interim reexamination of family income.

• For rent decreases, the PHA must implement the change no later than the first rent period

following completion of the interim reexamination. However, the PHA may choose to adopt a policy that would make the effective date of the rent decrease retroactive to the first of the month following completion of the reexamination. PHAs may choose to establish conditions or requirements for when such a retroactive application would apply. PHAs that choose to adopt such policies must ensure the earliest date that the retroactive decrease is applied is the later of:

• The first of the month following the date of the change that led to the interim reexamination;

or

• The first of the month following the most recent previous income examination.

In applying a retroactive change in rent as the result of an interim reexamination, the PHA must clearly communicate the effect of the retroactive adjustment to the family so that there is no confusion over the amount of the rent that is the family's responsibility.

Reexaminations

management operations. The Authority will decide to apply decreases retroactively on a case-by-case basis. When the Authority applies the results of interim decreases retroactively, the Authority will clearly communicate the effect of the retroactive adjustment to the family and may enter into a repayment agreement in accordance with Authority policies. The Authority will also clearly communicate the effect of the retroactive adjustment to the owner.

Reexaminations

Part Iii: Recalculating Family Share And Subsidy Amount

11-III.A. OVERVIEW

After gathering and verifying required information for an annual or interim reexamination, the PHA must recalculate the family share of the rent and the subsidy amount and notify the family and owner of the changes [24 CFR 982.516(d)(2), HCV 12-6 and 12-10]. While the basic policies that govern these calculations are provided in Chapter 6, this part lays out policies that affect these calculations during a reexamination.

11-III.B. CHANGES IN PAYMENT STANDARDS AND UTILITY ALLOWANCES

In order to calculate the family share of the rent and HAP amount correctly, changes in payment standards, subsidy standards, or utility allowances may need to be updated and included in the PHA's calculations. Specific policies governing how subsidy standards, payment standards, and utility allowances are applied are discussed below. Payment Standards [24 CFR 982.505 and FR Notice 5/7/24] The family share of the rent and HAP calculations must use the correct payment standard for the family, taking into consideration the family unit size, the size of unit, and the area in which the unit is located [HCV GB, p. 12-5]. See Chapter 6 for information on how to select the appropriate payment standard when the PHA changes its payment standard or when there is a change in family composition. Subsidy Standards [24 CFR 982.505(c)(4)] If there is a change in the family unit size that would apply to a family during the HAP contract term, either due to a change in family composition, or a change in the PHA's subsidy standards (see Chapter 5), the new family unit size must be used to determine the payment standard amount for the family immediately or at the family's first annual reexamination following the change in family unit size. Utility Allowances [24 CFR 982.517(d)] The family share of the rent and HAP calculations must reflect any changes in the family's utility arrangement with the owner, or in the PHA's utility allowance schedule [HCV GB, p. 12-5]. Chapter 16 discusses how utility allowance schedules are established. When there are changes in the utility arrangement with the owner, the PHA must use the utility allowances in effect at the time the new lease and HAP contract are executed. At reexamination, the PHA must use the PHA current utility allowance schedule [HCV GB, p. 18-8].

Reexaminations

11-III.C. NOTIFICATION OF NEW FAMILY SHARE AND HAP AMOUNT

The PHA must notify the owner and family of any changes in the amount of the HAP payment [HUD-52641, HAP Contract]. The notice must include the following information [HCV GB, p. 12-6]:

• The amount and effective date of the new HAP payment
• The amount and effective date of the new family share of the rent
• The amount and effective date of the new tenant rent to owner
• The family must be given an opportunity for an informal hearing regarding the PHA's

determination of their annual or adjusted income, and the use of such income to compute the housing assistance payment [24 CFR 982.555(a)(1)(i)] (see Chapter 16).

11-III.D. DISCREPANCIES

During an annual or interim reexamination, the PHA may discover that information previously reported by the family was in error, or that the family intentionally misrepresented information. In addition, the PHA may discover errors made by the PHA. When errors resulting in the overpayment or underpayment of subsidy are discovered, corrections will be made in accordance with the policies in Chapter 14.

Reexaminations

PART IV: NON-INTERIM REEXAMINATION TRANSACTIONS [Notice PIH 2023-27]

Families may experience changes within the household that do not trigger an interim reexamination under PHA policy and HUD regulations but which HUD still requires the PHA to report to HUD via Form HUD-50058. These are known as non-interim reexamination transactions. In these cases, PHAs will submit a separate, new action code on Form HUD-50058. The following is a list of non-interim reexamination transactions:

• Adding or removing a hardship exemption for the childcare expense deduction;
• Updating or removing the phased-in hardship relief for the health and medical care expense

deduction and/or reasonable attendant care and auxiliary apparatus expense deduction (families will begin receiving a 24-month phased-in relief at their next annual or interim reexamination, whichever occurs first);

• Adding or removing general hardship relief for the health and medical care expense

deduction and/or reasonable attendant care and auxiliary apparatus expense deduction;

• Adding or removing a minimum rent hardship;
• Adding or removing a non-family member (i.e., live-in aide, foster child, foster adult);
• Ending a family's EID or excluding 50 percent (decreased from 100 percent) of a family

member's increase in employment income at the start of the second 12- month EID period.

• Adding a family member and the increase in adjusted income does not trigger an interim

reexamination under the final rule;

• Removing a family member and the increase in adjusted income does not trigger an interim

reexamination under the final rule;

• Adding/updating a family or household member's Social Security number;
• Updating a family member's citizenship status from eligible to ineligible or vice versa,

resulting in a change to the family's rent and/or utility reimbursement, if applicable (i.e., family begins receiving prorated assistance or previously prorated assistance becomes full assistance), or updating the prorated rent calculation due to the addition or removal of family members in household with an ineligible noncitizen(s); and

• Rent increases

PHAs must make all other changes to assets, income, and deductions at the next annual or interim reexamination of income, whichever is sooner.

Reexaminations

TERMINATION OF ASSISTANCE AND TENANCY

HUD regulations specify mandatory and optional grounds for which a PHA can terminate a family's assistance. They also specify the circumstances under which an owner may terminate the tenancy of an assisted family. This chapter describes the policies that govern mandatory and optional terminations of assistance, and termination of tenancy by the owner. It is presented in three parts: Part I: Grounds for Termination of Assistance. This part describes the various circumstances under which assistance under the program can be terminated by the family or by the Authority. Part II: Approach to Termination of Assistance. This part describes the policies and the process that the Authority will use in evaluating decisions on whether to terminate assistance due to actions or inactions of the family where termination is an option. It specifies the alternatives that the Authority may consider in lieu of termination, the criteria the Authority will use when deciding what action to take, and the steps the Authority must take when terminating a family's assistance. Part III: Termination of Tenancy by the Owner. This part describes the HUD policies that govern the owner's right to terminate an assisted tenancy.

Part I: Grounds For Termination Of Assistance

12-I.A. OVERVIEW

HUD requires the Authority to terminate assistance for certain actions and inactions of the family and when the family no longer requires assistance due to increases in family income. HUD permits the Authority to terminate assistance for certain other actions or inactions of the family. In addition, a family may decide to withdraw from the program and terminate their HCV assistance at any time by notifying the Authority.

12-I.B. FAMILY NO LONGER REQUIRES ASSISTANCE [24 CFR 982.455]

As a family's income increases, the amount of the housing assistance payment decreases. If the amount of assistance provided by the Authority is reduced to zero, the family's assistance terminates automatically 180 days after the last HAP payment.

12-I.C. FAMILY CHOOSES TO TERMINATE ASSISTANCE

The family may request that the Authority terminate housing assistance payments on behalf of the family at any time.

12-I.D. MANDATORY TERMINATION OF ASSISTANCE

HUD requires the Authority to terminate assistance in the following circumstances. Eviction [24 CFR 982.552(b)(2), 24 CFR 5.2005(c)(1)] The Authority must terminate assistance whenever a family is evicted from a unit assisted under the HCV program for a serious or repeated violation of the lease. As discussed further in section 12-II.E, incidents of actual or threatened domestic violence, dating violence, sexual assault, stalking, or human trafficking may not be construed as serious or repeated violations of the lease by the victim or threatened victim of such violence or stalking.

Upon the Authority's HOTMA 102/104 compliance date, the below policy on failure to provide consent is added:

Authority Policy

The Authority will also terminate assistance if the family revokes consent for the Authority to collect information from financial institutions. Failure to Document Citizenship [24 CFR 982.552(b)(4) and [24 CFR 5.514(c)] The PHA must terminate assistance if (1) a family fails to submit required documentation within the required timeframe concerning any family member's citizenship or immigration status; (2) a family submits evidence of citizenship and eligible immigration status in a timely manner, but United States Citizenship and Immigration Services (USCIS) primary and secondary verification does not verify eligible immigration status of the family; or (3) a family member, as determined by the PHA, has knowingly permitted another individual who is not eligible for assistance to reside (on a permanent basis) in the unit. For (3) above, such termination must be for a period of at least 24 months. This does not apply to ineligible noncitizens already in the household where the family's assistance has been prorated. See Chapter 7 for a complete discussion of documentation requirements. Failure to Disclose and Document Social Security Numbers [24 CFR 5.218(c), Notice PIH 2018-24] The PHA must terminate assistance if a participant family fails to disclose the complete and accurate social security numbers of each household member and the documentation necessary to verify each social security number. However, if the family is otherwise eligible for continued program assistance, and the PHA determines that the family's failure to meet the SSN disclosure and documentation requirements was due to circumstances that could not have been foreseen and were outside of the family's control, the PHA may defer the family's termination and provide the opportunity to comply with the requirement within a period not to exceed 90 calendar days from the date the PHA determined the family to be noncompliant.

Failure of Students to Meet Ongoing Eligibility Requirements [24 CFR 982.552(b)(5) and FR 4/10/06] If a student enrolled at an institution of higher education is under the age of 24, is not a veteran, is not married, does not have dependent children, is not residing with their parents in an HCV assisted household, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the PHA must the terminate the student's assistance if, at the time of reexamination, either the student's income or the income of the student's parents (if applicable) exceeds the applicable income limit. If a participant household consists of both eligible and ineligible students, the eligible students shall not be terminated, but must be issued a voucher to move with continued assistance in accordance with program regulations and PHA policies, or must be given the opportunity to lease in place if the terminated ineligible student members elect to move out of the assisted unit. Death of the Sole Family Member [24 CFR 982.311(d) and Notice PIH 2010-9] The PHA must immediately terminate program assistance for deceased single member households.

12-I.E. MANDATORY POLICIES AND OTHER AUTHORIZED TERMINATIONS

Mandatory Policies [24 CFR 982.553(b) and 982.551(l)] HUD requires the PHA to establish policies that permit the PHA to terminate assistance if the PHA determines that:

• Any household member is currently engaged in any illegal use of a drug, or has a pattern of

illegal drug use that interferes with the health, safety, or right to peaceful enjoyment of the premises by other residents

• Any household member's abuse or pattern of abuse of alcohol may threaten the health,

safety, or right to peaceful enjoyment of the premises by other residents

• Any household member has violated the family's obligation not to engage in any drug-

related criminal activity

• Any household member has violated the family's obligation not to engage in violent criminal

activity

Use of Illegal Drugs and Alcohol Abuse

Drug-Related and Violent Criminal Activity [24 CFR 5.100] Drug means a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802). Drug-related criminal activity is defined by HUD as the illegal manufacture, sale, distribution, or use of a drug, or the possession of a drug with intent to manufacture, sell, distribute or use the drug. Violent criminal activity means any criminal activity that has as one of its elements the use, attempted use, or threatened use of physical force substantial enough to cause, or be reasonably likely to cause, serious bodily injury or property damage.

In making its decision to terminate assistance, the Authority will consider alternatives as described in Section 12-II.C and other factors described in Sections 12-II.D and 12-II.E. Upon consideration of such alternatives and factors, the Authority may, on a case-by-case basis, choose not to terminate assistance.

Other Authorized Reasons for Termination of Assistance [24 CFR 982.552(c), 24 CFR 5.2005(c), 24 CFR 984.101(d)] HUD permits the PHA to terminate assistance under a number of other circumstances. It is left to the discretion of the PHA whether such circumstances in general warrant consideration for the termination of assistance. As discussed further in section 12-II.E, the Violence against Women Act prohibits PHAs from considering incidents of, or criminal activity directly related to, domestic violence, dating violence, sexual assault, stalking, or human trafficking as reasons for terminating the assistance of a victim of such abuse. Additionally, per 24 CFR 984.101(d), PHAs are no longer permitted to terminate assistance to a family due to the family's failure to meet its obligations under the Family Self-Sufficiency (FSS) contract of participation.

In making its decision to terminate assistance, the PHA will consider alternatives as described in Section 12-II.C and other factors described in Sections 12-II.D and 12-II.E. Upon consideration of such alternatives and factors, the PHA may, on a case-by-case basis, choose not to terminate assistance.

Family Absence from the Unit [24 CFR 982.312] The family may be absent from the unit for brief periods. The PHA must establish a policy on how long the family may be absent from the assisted unit. However, the family may not be absent from the unit for a period of more than 180 consecutive calendar days for any reason. Absence in this context means that no member of the family is residing in the unit.

list until it has reached the required number of special purpose vouchers, when applicable. If after implementing all reasonable cost cutting measures there is not enough funding available to provide continued assistance for current participants, the Authority will terminate HAP contracts as a last resort. Prior to terminating any HAP contracts, the Authority will inform the local HUD field office. The Authority will terminate the minimum number needed in order to reduce HAP costs to a level within the Authority's annual budget authority. If the Authority must terminate HAP contracts due to insufficient funding, the Authority will do so in accordance with the following criteria and instructions: Families who have been assisted in the HCV program the longest will be the first to be terminated, excluding families that include elderly or disabled family members. Families comprising the required number of special purpose vouchers, including nonelderly disabled (NED), HUD-Veteran's Affairs Supportive Housing (HUD- VASH), and family unification program (FUP) will be the last to be terminated.

Part Ii: Approach To Termination Of Assistance

12-II.A. OVERVIEW

The PHA is required by regulation to terminate a family's assistance for certain actions or inactions of the family. For other types of actions or inactions of the family, the regulations give the PHA the authority to either terminate the family's assistance or to take another action. This part discusses the various actions the PHA may choose to take when it has discretion, and outlines the criteria the PHA will use to make its decision about whether or not to terminate assistance. It also specifies the requirements for the notification to the family of the PHA's intent to terminate assistance.

12-II.B. METHOD OF TERMINATION [24 CFR 982.552(a)(3)]

• Terminating housing assistance payments under a current HAP contract,
• Refusing to enter into a new HAP contract or approve a lease, or
• Refusing to process a request for or to provide assistance under portability procedures.

12-II.C. ALTERNATIVES TO TERMINATION OF ASSISTANCE

Change in Household Composition As a condition of continued assistance, the PHA may require that any household member who participated in or was responsible for an offense no longer resides in the unit [24 CFR 982.552(c)(2)(ii)].

12-II.D. CRITERIA FOR DECIDING TO TERMINATE ASSISTANCE

Evidence For criminal activity, HUD permits the PHA to terminate assistance if a preponderance of the evidence indicates that a household member has engaged in the activity, regardless of whether the household member has been arrested or convicted [24 CFR 982.553(c)].

(as discussed further in section 12-II.E) a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking The length of time since the violation occurred, including the age of the individual at the time of the conduct, as well as the family's recent history and the likelihood of favorable conduct in the future While a record or records of arrest will not be used as the sole basis for termination, an arrest may, however, trigger an investigation to determine whether the participant actually engaged in disqualifying criminal activity. As part of its investigation, the Authority may obtain the police report associated with the arrest and consider the reported circumstances of the arrest. The Authority may also consider: Any statements made by witnesses or the participant not included in the police report Whether criminal charges were filed Whether, if filed, criminal charges were abandoned, dismissed, not prosecuted, or ultimately resulted in an acquittal Any other evidence relevant to determining whether or not the participant engaged in disqualifying activity Evidence of criminal conduct will be considered if it indicates a demonstrable risk to safety and/or property In the case of drug or alcohol abuse, whether the culpable household member is participating in or has successfully completed a supervised drug or alcohol rehabilitation program or has otherwise been rehabilitated successfully The Authority will require the participant to submit evidence of the household member's current participation in or successful completion of a supervised drug or alcohol rehabilitation program, or evidence of otherwise having been rehabilitated successfully. In the case of program abuse, the dollar amount of the overpaid assistance and whether or not a false certification was signed by the family (See Chapter 16- IV.B. Repayment Policy, Criminal Prosecution for Program Fraud/Abuse). Reasonable Accommodation [24 CFR 982.552(c)(2)(iv)] If the family includes a person with disabilities, the PHA's decision to terminate the family's assistance is subject to consideration of reasonable accommodation in accordance with 24 CFR Part 8.

12-II.E. TERMINATIONS RELATED TO DOMESTIC VIOLENCE, DATING

VIOLENCE, SEXUAL ASSAULT, STALKING, OR HUMAN TRAFFICKING This section describes the protections against termination of assistance that the Violence against Women Act (VAWA) provides for victims of domestic violence, dating violence, sexual assault, stalking, and human trafficking. For general VAWA requirements, key VAWA definitions, and PHA policies pertaining to notification, documentation, and confidentiality, see section 16-IX of this plan. VAWA Protections against Termination VAWA provides four specific protections against termination of HCV assistance for victims of domestic violence, dating violence, sexual assault or stalking. (Note: The second, third, and fourth protections also apply to terminations of tenancy or occupancy by owners participating in the HCV program, as do the limitations discussed under the next heading.)

• Although the VAWA 2022 statute does not specifically include human trafficking in the list

of victims protected under VAWA, in 2022 HUD began including human trafficking as part of the list of victims protected under VAWA (as seen in Notices PIH 2022-06, PIH 2022-22, and PIH 2022-24). In the absence of a final rule implementing VAWA 2022 and to mirror HUD's recent usage, this policy includes human trafficking in addition to domestic violence, dating violence, sexual assault, and stalking anywhere such a list appears. First, VAWA provides that a PHA may not terminate assistance to a family that moves out of an assisted unit in violation of the lease, with or without prior notification to the PHA, if the move occurred to protect the health or safety of a family member who is or has been the victim of domestic violence, dating violence, sexual assault stalking, or human trafficking, and who reasonably believed they were imminently threatened by harm from further violence if they remained in the unit [see 24 CFR 982.354(b)(4)]. Second, it provides that an incident or incidents of actual or threatened domestic violence, dating violence, sexual assault, stalking, or human trafficking may not be construed either as a serious or repeated lease violation by the victim or as good cause to terminate the assistance of the victim [see 24 CFR 5.2005(c)(1)]. Third, it provides that criminal activity directly related to domestic violence, dating violence, sexual assault, stalking, or human trafficking may not be construed as cause for terminating the assistance of a tenant if a member of the tenant's household, a guest, or another person under the tenant's control is the one engaging in the criminal activity and the tenant or affiliated individual or other individual is the actual or threatened victim of the domestic violence, dating violence, sexual assault, stalking, or human trafficking [see 24 CFR 5.2005(c)(2)]. Fourth, it gives PHAs the authority to terminate assistance to any tenant or lawful occupant who engages in criminal acts of physical violence against family members or others without terminating assistance to, or otherwise penalizing, the victim of the violence [24 CFR 5.2009(a)]. PHAs and owners may not coerce, intimidate, threaten, interfere with, or retaliate against any person who exercises or assists or encourages a person to exercise any rights or protections under VAWA [FR Notice 1/4/23].

Limitations on VAWA Protections [24 CFR 5.2005(d) and (e)] VAWA does not limit the authority of a PHA to terminate the assistance of a victim of abuse for reasons unrelated to domestic violence, dating violence, sexual assault, stalking, or human trafficking so long as the PHA does not subject the victim to a more demanding standard than it applies to other program participants [24 CFR 5.2005(d)(1)]. Likewise, VAWA does not limit the authority of a PHA to terminate the assistance of a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking if the PHA can demonstrate an actual and imminent threat to other tenants or those employed at or providing service to the assisted property if the victim is not terminated from assistance [24 CFR 5.2005(d)(2)]. HUD regulations define actual and imminent threat to mean words, gestures, actions, or other indicators of a physical threat that (a) is real, (b) would occur within an immediate time frame, and (c) could result in death or serious bodily harm [24 CFR 5.2005(d)(2) and (e)]. In determining whether an individual would pose an actual and imminent threat, the factors to be considered include:

• The duration of the risk
• The nature and severity of the potential harm
• The likelihood that the potential harm will occur
• The length of time before the potential harm would occur [24 CFR 5.2005(e)]

In order to demonstrate an actual and imminent threat, the PHA must have objective evidence of words, gestures, actions, or other indicators. Even when a victim poses an actual and imminent threat, however, HUD regulations authorize a PHA to terminate the victim's assistance "only when there are no other actions that could be taken to reduce or eliminate the threat" [24 CFR 5.2005(d)(3)].

Documentation of Abuse [24 CFR 5.2007]

Terminating the Assistance of a Domestic Violence Perpetrator Although VAWA provides protection against termination of assistance for victims of domestic violence, it does not provide such protection for perpetrators. VAWA gives the PHA the explicit authority to "terminate assistance to any individual who is a tenant or lawful occupant and who engages in criminal acts of physical violence against family members or others" without terminating assistance to "or otherwise penalizing the victim of such violence who is also a tenant or lawful occupant" [24 CFR 5.2009(a)]. This authority is not dependent on a bifurcated lease or other eviction action by an owner against an individual family member. Further, this authority supersedes any local, state, or other federal law to the contrary. However, if the PHA chooses to exercise this authority, it must follow any procedures prescribed by HUD or by applicable local, state, or federal law regarding termination of assistance. This means that the PHA must follow the same rules when terminating assistance to an individual as it would when terminating the assistance of an entire family [FR Notice 3/16/07]. If the perpetrator remains in the unit, the PHA continues to pay the owner until the PHA terminates the perpetrator from the program. The PHA must not stop paying HAP until 30 days after the owner bifurcates the lease to evict the perpetrator. The PHA may pay HAP for the full month if the 30-day period will end mid-month [Notice PIH 2017-08]. If the perpetrator is the only participant eligible to receive assistance, the PHA will provide any remaining participant a chance to establish eligibility for the program. If the remaining participant cannot do so, the PHA will provide them with 30 days to establish eligibility for another housing program prior to termination of the HAP contract.

16-IX.D. The Authority will also consider the factors in section 12-II.D. Upon such

consideration, the Authority may, on a case-by-case basis, choose not to terminate the assistance of the culpable family member. If the Authority does terminate the assistance of the culpable family member, it will do so in accordance with applicable law, HUD regulations, and the policies in this plan.

12-II.F. TERMINATION NOTICE

HUD regulations require PHAs to provide written notice of termination of assistance to a family only when the family is entitled to an informal hearing. However, since the family's HAP contract and lease will also terminate when the family's assistance terminates [form HUD- 52641], it is a good business practice to provide written notification to both owner and family anytime assistance will be terminated, whether voluntarily or involuntarily.

Still other notice requirements apply in two situations:

• If a criminal record is the basis of a family's termination, the PHA must provide a copy of

the record to the subject of the record and the tenant so that they have an opportunity to dispute the accuracy and relevance of the record [24 CFR 982.553(d)(2)].

• If immigration status is the basis of a family's termination, as discussed in section 12-I.D, the

special notice requirements in section 16-III.D must be followed.

Part Iii: Termination Of Tenancy By The Owner

12-III.A. OVERVIEW

directly involved. However, the owner is under some constraints when terminating an assisted tenancy. Termination of tenancy for certain reasons will also result in termination of assistance as discussed in this section.

12-III.B. GROUNDS FOR OWNER TERMINATION OF TENANCY [24 CFR 982.310, 24

CFR 5.2005(c), and Form HUD-52641-A, Tenancy Addendum] During the term of the lease, the owner is not permitted to terminate the tenancy except for serious or repeated violations of the lease, certain violations of state or local law, or other good cause. Serious or Repeated Lease Violations The owner is permitted to terminate the family's tenancy for serious or repeated violations of the terms and conditions of the lease, except when the violations are related to incidents of actual or threatened domestic violence, dating violence, sexual assault, stalking, and human trafficking and the victim is protected from eviction by the Violence against Women Act (see section 12- II.E). A serious lease violation includes failure to pay rent or other amounts due under the lease. However, the PHA's failure to make a HAP payment to the owner is not a violation of the lease between the family and the owner. Violation of Federal, State, or Local Law The owner is permitted to terminate the tenancy if a family member violates federal, state, or local law that imposes obligations in connection with the occupancy or use of the premises. Criminal Activity or Alcohol Abuse The owner may terminate tenancy during the term of the lease if any covered person—meaning any member of the household, a guest, or another person under the tenant's control—commits any of the following types of criminal activity (for applicable definitions see 24 CFR 5.100):

• Any criminal activity that threatens the health or safety of, or the right to peaceful enjoyment

of the premises by, other residents (including property management staff residing on the premises)

• Any criminal activity that threatens the health or safety of, or the right to peaceful enjoyment

of their residences by, persons residing in the immediate vicinity of the premises

• Any violent criminal activity on or near the premises
• Any drug-related criminal activity on or near the premises

However, in the case of criminal activity directly related to domestic violence, dating violence, sexual assault, stalking, or human trafficking if the tenant or an affiliated individual is the victim, the criminal activity may not be construed as cause for terminating the victim's tenancy (see section 12-II.E).

The owner may terminate tenancy during the term of the lease if any member of the household is:

• Fleeing to avoid prosecution, custody, or confinement after conviction for a crime or an

attempt to commit a crime that is a felony under the laws of the place from which the individual flees, or that, in the case of the State of New Jersey, is a high misdemeanor; or

• Violating a condition of probation or parole imposed under federal or state law.

The owner may terminate tenancy during the term of the lease if any member of the household has engaged in abuse of alcohol that threatens the health, safety, or right to peaceful enjoyment of the premises by other residents. Evidence of Criminal Activity The owner may terminate tenancy and evict by judicial action a family for criminal activity by a covered person if the owner determines the covered person has engaged in the criminal activity, regardless of whether the covered person has been arrested or convicted for such activity and without satisfying the standard of proof used for a criminal conviction. This is the case except in certain incidents where the criminal activity directly relates to domestic violence, dating violence, sexual assault, stalking, or human trafficking, and the tenant or an affiliated individual is the victim or threatened victim of the domestic violence, dating violence, sexual assault, stalking, or human trafficking. Other Good Cause During the initial lease term, the owner may not terminate the tenancy for "other good cause" unless the owner is terminating the tenancy because of something the family did or failed to do. During the initial lease term or during any extension term, other good cause includes the disturbance of neighbors, destruction of property, or living or housekeeping habits that cause damage to the unit or premises. After the initial lease term, "other good cause" for termination of tenancy by the owner includes:

• Failure by the family to accept the offer of a new lease or revision
• The owner's desire to use the unit for personal or family use, or for a purpose other than as a

residential rental unit

• A business or economic reason for termination of the tenancy (such as sale of the property,

renovation of the unit, or desire to lease the unit at a higher rent) After the initial lease term, the owner may give the family notice at any time, in accordance with the terms of the lease. If a property is subject to foreclosure, during the term of the lease, the new owner of the property does not have good cause to terminate the tenant's lease, unless the new owner will occupy the unit as their primary residence and has provided the tenant with at least a 90-day notice. In that case, the lease may be terminated effective on the date of sale, although the tenant is still entitled to a 90-day notice to vacate. See Section 13-II.G for a discussion of PHA policies relating to units in foreclosure.

12-III.C. EVICTION [24 CFR 982.310(e) and (f) and Form HUD-52641-A, Tenancy

Addendum] The owner must give the tenant a written notice that specifies the grounds for termination of tenancy during the term of the lease. The tenancy does not terminate before the owner has given this notice, and the notice must be given at or before commencement of the eviction action. The notice of grounds may be included in, or may be combined with, any owner eviction notice to the tenant. Owner eviction notice means a notice to vacate, or a complaint or other initial pleading used under state or local law to commence an eviction action. The owner may only evict the tenant from the unit by instituting a court action. The owner must give the PHA a copy of any eviction notice at the same time the owner notifies the family. The family is also required to give the PHA a copy of any eviction notice (see Chapter 5).

12-III.D. DECIDING WHETHER TO TERMINATE TENANCY [24 CFR 982.310(h),

24 CFR 982.310(h)(4)] An owner who has grounds to terminate a tenancy is not required to do so, and may consider all of the circumstances relevant to a particular case before making a decision. These might include:

• The nature of the offending action
• The seriousness of the offending action;
• The effect on the community of the termination, or of the owner's failure to terminate the

tenancy;

• The extent of participation by the leaseholder in the offending action;
• The effect of termination of tenancy on household members not involved in the offending

activity;

• The demand for assisted housing by families who will adhere to lease responsibilities;
• The extent to which the leaseholder has shown personal responsibility and taken all

reasonable steps to prevent or mitigate the offending action;

• The effect of the owner's action on the integrity of the program.

The owner may require a family to exclude a household member in order to continue to reside in the assisted unit, where that household member has participated in or been culpable for action or failure to act that warrants termination. In determining whether to terminate tenancy for illegal use of drugs or alcohol abuse by a household member who is no longer engaged in such behavior, the owner may consider whether such household member is participating in or has successfully completed a supervised drug or alcohol rehabilitation program, or has otherwise been rehabilitated successfully (42 U.S.C.

13661). For this purpose, the owner may require the tenant to submit evidence of the household member's current participation in, or successful completion of, a supervised drug or alcohol rehabilitation program or evidence of otherwise having been rehabilitated successfully. The owner's termination of tenancy actions must be consistent with the fair housing and equal opportunity provisions in 24 CFR 5.105. An owner's decision to terminate tenancy for incidents related to domestic violence, dating violence, sexual assault, stalking, or human trafficking is limited by the Violence against Women Act (VAWA) and the conforming regulations in 24 CFR Part 5, Subpart L. (See section 12-II.E.)

12-III.E. EFFECT OF TENANCY TERMINATION ON THE FAMILY'S ASSISTANCE

If a termination is not due to a serious or repeated violation of the lease, and if the PHA has no other grounds for termination of assistance, the PHA may issue a new voucher so that the family can move with continued assistance (see Chapter 10).

EXHIBIT 12-1: STATEMENT OF FAMILY OBLIGATIONS Following is a listing of a participant family's obligations under the HCV program:

• The family must supply any information that the PHA or HUD determines to be necessary,

including submission of required evidence of citizenship or eligible immigration status.

• The family must supply any information requested by the PHA or HUD for use in a regularly

scheduled reexamination or interim reexamination of family income and composition.

• The family must disclose and verify social security numbers and sign and submit consent

forms for obtaining information.

• Any information supplied by the family must be true and complete.
• The family may be held responsible for a breach of housing quality standards caused by the

family's failure to pay tenant-provided utilities or appliances, or damages to the dwelling unit or premises beyond ordinary wear and tear caused by any member of the household or guest.

• The family must allow the PHA to inspect the unit at reasonable times and after reasonable

notice, as described in Chapter 8 of this plan.

• The family must not commit any serious or repeated violation of the lease.

cause damage to the unit or premises, and criminal activity. Generally, the criterion to be used will be whether or not the reason for the eviction was the fault of the tenant or guests. Any incidents of, or criminal activity related to, domestic violence, dating violence, sexual assault, stalking, or human trafficking will not be construed as serious or repeated lease violations by the victim [see 24 CFR 5.2005(c)(1)].

• The family must notify the PHA and the owner before moving out of the unit or terminating

the lease.

• The family must promptly give the PHA a copy of any owner eviction notice.
• The family must use the assisted unit for residence by the family. The unit must be the

family's only residence.

• The composition of the assisted family residing in the unit must be approved by the PHA.

The family must promptly notify the PHA in writing of the birth, adoption, or court-awarded custody of a child. The family must request PHA approval to add any other family member as an occupant of the unit.

• The family must promptly notify the PHA in writing if any family member no longer lives in

the unit.

• If the PHA has given approval, a foster child or a live-in aide may reside in the unit. The

PHA has the discretion to adopt reasonable policies concerning residency by a foster child or a live-in aide, and to define when PHA consent may be given or denied. For policies related to the request and approval/disapproval of foster children, foster adults, and live-in aides, see Chapter 3 (Sections I.K and I.M), and Chapter 11 (Section II.B).

• The family must not sublease the unit, assign the lease, or transfer the unit.

• The family must supply any information requested by the PHA to verify that the family is

living in the unit or information related to family absence from the unit.

• The family must promptly notify the PHA when the family is absent from the unit.

OWNERS

INTRODUCTION for participating families. The term "owner" refers to any person or entity with the legal right to lease or sublease a unit to a participant in the HCV program [24 CFR 982.4(b)]. The term "owner" includes a principal or other interested party [24 CFR 982.453; 24 CFR 982.306(f)], such as a designated agent of the owner. families, maintaining the dwelling unit, enforcing the lease, and complying with various contractual obligations. The chapter is organized in two parts: Part I: Owners in the HCV Program. This part discusses the role of an owner in the PHA's HCV program and highlights key owner rights and responsibilities. Part II: HAP Contracts. This part explains provisions of the HAP contract and the relationship between the PHA and the owner as expressed in the HAP contract. For detailed information about HCV program responsibilities and processes, including PHA policies in key areas, owners will need to refer to several other chapters in this plan. Where appropriate, Chapter 13 will reference the other chapters.

PART I. OWNERS IN THE HCV PROGRAM

13-I.A. OWNER RECRUITMENT AND RETENTION [HCV GB, pp. 2-4 to 2-6;

HCV Landlord Strategy Guidebook for PHAs] Education and Outreach PHAs are responsible for ensuring that very low-income families have access to all types and ranges of affordable housing in the PHA's jurisdiction, particularly housing outside areas of poverty or minority concentration. A critical element in fulfilling this responsibility is for the PHA to ensure that a sufficient number of owners, representing all types and ranges of affordable housing in the PHA's jurisdiction, are willing to participate in the HCV program. To accomplish this objective, PHAs must identify and recruit new owners to participate in the program. PHAs can provide education and outreach in a variety of ways. Some strategies include hosting or attending events targeted to landlords or affordable housing providers. Education and outreach can include activities like newsletters, presentations, briefings to community groups, one-on-one appointments, or other ways of sharing information or creating relationships between PHAs and owners. The PHA may also provide monetary incentives and reimbursements to encourage participation in the program. If the PHA will be conducting outreach events, the PHA must ensure that notices and communications during outreach events are provided in a manner that is effective for persons with hearing, visual, and other communications-related disabilities. PHAs must also take reasonable steps to ensure meaningful access to programs to persons with limited English proficiency.

13-I.B. BASIC HCV PROGRAM REQUIREMENTS

HUD requires the PHA to assist families in their housing search by providing the family with a list of landlords or other parties known to the PHA who may be willing to lease a unit to the family, or to help the family find a unit. As part of the briefing packet, the PHA is also required to provide a current listing of accessible units known to the PHA. Although the PHA cannot maintain a list of owners that are pre-qualified to participate in the program, owners may indicate to the PHA their willingness to lease a unit to an eligible HCV family, or to help the HCV family find a unit [24 CFR 982.301(b)(11)].

The PHA must determine that the proposed rent for the unit is reasonable [24 CFR 982.305(a)]. The rent must be reasonable in relation to comparable unassisted units in the area and must not be in excess of rents charged by the owner for comparable, unassisted units on the premises. See Chapter 8 for a discussion of requirements and policies on rent reasonableness, rent comparability and the rent reasonableness determination process. At initial lease-up of a unit, if the gross rent exceeds the applicable payment standard, the PHA must ensure that the family share does not exceed 40 percent of the family's monthly adjusted income [24 CFR 982.305(a)]. See Chapter 6 for a discussion of the calculation of family income, family share of rent and HAP. The dwelling lease must comply with all program requirements [24 CFR 982.308]. Owners are encouraged to use their standard leases when renting to an assisted family. The HUD Tenancy Addendum (Form HUD-52641-A) includes the HUD requirements governing the tenancy and must be added word-for-word to the owner's lease. See Chapter 9 for a discussion of the dwelling lease and tenancy addendum, including lease terms and provisions. The PHA and the owner must execute a Housing Assistance Payment (HAP) Contract (Form HUD-52641). The HAP contract format is prescribed by HUD. See Chapter 9 for a discussion of the HUD requirements for execution of the HAP contract.

13-I.C. OWNER RESPONSIBILITIES [24 CFR 982.452]

The basic owner responsibilities in the HCV program are outlined in the regulations as follows:

• Complying with all of the owner's obligations under the housing assistance payments (HAP)

contract and the lease

• Performing all management and rental functions for the assisted unit, including selecting a

voucher-holder to lease the unit, and deciding if the family is suitable for tenancy of the unit

• Maintaining the unit in accordance with housing quality standards, including performance of

ordinary and extraordinary maintenance o A unit is not in compliance with housing quality standards if the PHA or other inspector authorized by the state or local government determines that the unit has deficiencies based upon an inspection, the agency or inspector notifies the owner in writing of the deficiencies, and the deficiencies are not remedied within the appropriate timeframe.

• Complying with equal opportunity requirements
• Preparing and furnishing to the PHA information required under the HAP contract
• Collecting the security deposit, the tenant rent, and any charges for unit damage by

the family

• Enforcing tenant obligations under the dwelling lease
• Paying for utilities and services that are not the responsibility of the family as specified in

the lease

• Allowing reasonable modifications to a dwelling unit occupied or to be occupied by a

disabled person [24 CFR 100.203]

• Complying with the Violence against Women Act (VAWA) when screening prospective

HCV tenants or terminating the tenancy of an HCV family [see 24 CFR Part 5, Subpart L; 24 CFR 982.310(h)(4); 24 CFR 982.452(b)(1); and FR Notice 1/4/23]

13-I.D. OWNER QUALIFICATIONS

The PHA does not formally approve an owner to participate in the HCV program. However, there are a number of criteria where the PHA may deny approval of an assisted tenancy based on past owner behavior, conflict of interest, or other owner-related issues. No owner has a right to participate in the HCV program [24 CFR 982.306(e)]. The PHA must not approve the assisted tenancy if the PHA has been informed that the owner has been debarred, suspended, or subject to a limited denial of participation under 24 CFR part 24. HUD may direct the PHA not to approve a tenancy request if a court or administrative agency has determined that the owner violated the Fair Housing Act or other federal equal opportunity requirements, or if such an action is pending. Leasing to Relatives [24 CFR 982.306(d), HCV GB p. 11-2] The PHA must not approve a tenancy if the owner is the parent, child, grandparent, grandchild, sister, or brother of any member of the family. The PHA may make an exception as a reasonable accommodation for a family member with a disability. The owner is required to certify that no such relationship exists. This restriction applies at the time that the family receives assistance under the HCV program for occupancy of a particular unit. Current contracts on behalf of owners and families that are related may continue, but any new leases or contracts for these families may not be approved. Conflict of Interest [24 CFR 982.161; HCV GB p. 8-19; Form HUD-52641, Section 13] The PHA must not approve a tenancy in which any of the following classes of persons has any interest, direct or indirect, during tenure or for one year thereafter:

• Any present or former member or officer of the PHA (except a participant commissioner)
• Any employee of the PHA, or any contractor, subcontractor or agent of the PHA, who

formulates policy or who influences decisions with respect to the programs

• Any public official, member of a governing body, or State or local legislator, who exercises

functions or responsibilities with respect to the programs

• Any member of the Congress of the United States

Such "covered individual" may not have any direct or indirect interest in the HAP contract or in any benefits or payments under the contract (including the interest of an immediate family member of such covered individual) while such person is a covered individual or for one year thereafter. Immediate family member means the spouse, parent (including a stepparent), child (including a stepchild), grandparent, grandchild, sister, or brother (including a stepsister or stepbrother) of any covered individual.

HUD may waive the conflict of interest requirements, except for members of Congress, for good cause. The PHA must submit a waiver request to the appropriate HUD Field Office for determination. Any waiver request submitted by the PHA must include the following [HCV Guidebook pp.11-2 and 11-3]:

• Complete statement of the facts of the case;
• Analysis of the specific conflict of interest provision of the HAP contract and justification as

to why the provision should be waived;

• Analysis of and statement of consistency with state and local laws. The local HUD office, the

PHA, or both parties may conduct this analysis. Where appropriate, an opinion by the state's attorney general should be obtained;

• Opinion by the local HUD office as to whether there would be an appearance of impropriety

if the waiver were granted;

• Statement regarding alternative existing housing available for lease under the HCV program

or other assisted housing if the waiver is denied;

• If the case involves a hardship for a particular family, statement of the circumstances and

discussion of possible alternatives;

• If the case involves a public official or member of the governing body, explanation of their

duties under state or local law, including reference to any responsibilities involving the HCV program;

• If the case involves employment of a family member by the PHA or assistance under the

HCV program for an eligible PHA employee, explanation of the responsibilities and duties of the position, including any related to the HCV program;

• If the case involves an investment on the part of a member, officer, or employee of the PHA,

description of the nature of the investment, including disclosure/divestiture plans. Where the PHA has requested a conflict of interest waiver, the PHA may not execute the HAP contract until HUD has made a decision on the waiver request.

Owner Actions That May Result in Disapproval of a Tenancy Request [24 CFR 982.306(c)] HUD regulations permit the PHA to disapprove a request for tenancy for various actions and inactions of the owner. If the PHA disapproves a request for tenancy because an owner is not qualified, it may not terminate the HAP contract for any assisted families that are already living in the owner's properties unless the owner has violated the HAP contract for those units [HCV GB p. 11-4].

In considering whether to disapprove owners for any of the discretionary reasons listed above, the Authority will consider any mitigating factors. Such factors may include, but are not limited to, the seriousness of the violation in relation to program requirements, the impact on the ability of families to lease units under the program, health and safety of participating families, among others. Upon consideration of such circumstances, the Authority may, on a case-by-case basis, choose to approve an owner. Legal Ownership of Unit The following represents PHA policy on legal ownership of a dwelling unit to be assisted under the HCV program.

13-I.E. NON-DISCRIMINATION [HAP Contract – Form HUD-52641]

The owner must not discriminate against any person because of race, color, religion, sex, national origin, age, familial status, or disability, in connection with any actions or responsibilities under the HCV program and the HAP contract with the PHA. The owner must cooperate with the PHA and with HUD in conducting any equal opportunity compliance reviews and complaint investigations in connection with the HCV program and the HAP contract with the PHA. See Chapter 2 for a more thorough discussion of Fair Housing and Equal Opportunity requirements in the HCV program.

Part Ii. Hap Contracts

13-II.A. OVERVIEW

The HAP contract (Form HUD-52641) represents a written agreement between the PHA and the owner of the dwelling unit occupied by a HCV assisted family. The contract spells out the owner's responsibilities under the program, as well as the PHA's obligations. Under the HAP contract, the PHA agrees to make housing assistance payments to the owner on behalf of the family approved by the PHA to occupy the unit. The HAP contract is used for all HCV tenant-based program tenancies except for assistance under the Section 8 homeownership program, and assistance to families that own a manufactured home and use their assistance to lease the space for the manufactured home. See Chapter 15 for a discussion of any special housing types included in the PHA's HCV program. When the PHA has determined that the unit meets program requirements and the tenancy is approvable, the PHA and owner must execute the HAP contract. See Chapter 9 for a discussion of the leasing process, including provisions for execution of the HAP contract.

13-II.B. HAP CONTRACT CONTENTS

The HAP contract format is required by HUD, specifically Housing Assistance Payment (HAP) Contract, Form HUD-52641. The HAP contract contains three parts. Part A of the contract includes basic contract information: the names of the tenant and all household members, the address of the contract unit, start and end dates of initial lease term, the amount of initial monthly rent to owner, the amount of initial housing assistance payment, the utilities and appliances to be supplied by owner and tenant, and the signatures of the PHA representative and owner [HCV Guidebook, pp. 11-10 and 11-11]. In general, the HAP contract cannot be modified. However, PHAs do have the discretion to add language to Part A of the HAP contract which prohibits the owner from collecting a security deposit in excess of private market practices or in excess of amounts charged to unassisted tenants. PHA policy on the amount of security deposit an owner may collect is found in

PHAs also have the discretion to add language to Part A of the HAP contract that defines when the housing assistance payment by the PHA is deemed received by the owner (e.g., upon mailing by the PHA or actual receipt by the owner).

Part B is the body of the contract. It describes in detail program requirements affecting the owner and owner roles and responsibilities under the HCV program. Most of the requirements contained in Part B of the HAP contract are outlined elsewhere in this plan. Topics addressed in Part B include:

• Lease of Contract Unit
• Maintenance, Utilities, and Other Services
• Term of HAP Contract
• Provision and Payment of Utilities and Appliances
• Rent to Owner: Reasonable Rent
• PHA Payment to Owner
• Prohibition of Discrimination
• Owner's Breach of HAP Contract
• PHA and HUD Access to Premises and Owner's Records
• Exclusion of Third-Party Rights
• Conflict of Interest
• Assignment of the HAP Contract
• Written Notices
• Entire Agreement Interpretation

Part C of the contract includes the Tenancy Addendum (Form HUD-52641-A). The addendum sets forth the tenancy requirements for the program and the composition of the household, as approved by the PHA. The tenant has the right to enforce the Tenancy Addendum against the owner. The terms of the Tenancy Addendum prevail over any other provisions of the lease.

13-II.C. HAP CONTRACT PAYMENTS

General During the term of the HAP contract, and subject to the provisions of the HAP contract, the PHA must make monthly HAP payments to the owner on behalf of the family at the beginning of each month. If a lease term begins after the first of the month, the HAP payment for the first month is prorated for a partial month. The amount of the HAP payment is determined according to the policies described in Chapter 6 and is subject to change during the term of the HAP contract. The PHA must notify the owner and the family in writing of any changes in the HAP payment. HAP payments can be made only during the lease term, and only while the family is residing in the unit. The monthly HAP payment by the PHA is credited toward the monthly rent to owner under the family's lease. The total of the rent paid by the tenant and the HAP payment is equal to the rent to owner as specified in the lease.

The family is not responsible for payment of the HAP payment, and the PHA is not responsible for payment of the family share of rent. The family's share of the rent cannot be more than the difference between the rent to owner and the HAP payment. The owner may not demand or accept any rent payment from the tenant in excess of this maximum [24 CFR 982.451(b)(4)]. The owner may not charge the tenant extra amounts for items customarily included in rent in the locality or provided at no additional cost to unsubsidized tenants in the premises [24 CFR 982.510(c)]. See Chapter 9 for a discussion of separate, non-lease agreements for services, appliances and other items that are not included in the lease. If the owner receives any excess HAP from the PHA, the excess amount must be returned immediately. If the PHA determines that the owner is not entitled to all or a portion of the HAP, the PHA may deduct the amount of overpayment from any amounts due to the owner, including amounts due under any other Section 8 HCV contract. See Chapter 16 for additional detail on owner reimbursement of HAP overpayments. Owner Certification of Compliance Unless the owner complies with all provisions of the HAP contract, the owner is not entitled to receive housing assistance payments under the HAP contract [HAP Contract – Form HUD-52641]. By accepting the monthly check from the PHA, the owner certifies to compliance with the terms of the HAP contract. This includes certification that the owner is maintaining the unit and premises in accordance with housing quality standards; that the contract unit is leased to the tenant family and, to the best of the owner's knowledge, the family resides in the unit as the family's only residence; the rent to owner does not exceed rents charged by the owner for comparable unassisted units on the premises; and that the owner does not receive (other than rent to owner) any additional payments or other consideration for rent of the contract unit during the HAP term. Late HAP Payments [24 CFR 982.451(a)(5)] The PHA is responsible for making HAP payments promptly when due to the owner, in accordance with the terms of the HAP contract. After the first two calendar months of the HAP contract term, the HAP contract provides for late penalties if the PHA fails to make the HAP payment on time. Penalties for late HAP payments can only be imposed if 1) the penalties are in accordance with generally accepted local rental market practices and law governing penalties for late payment by tenants; 2) it is the owner's normal business practice to charge late payment penalties for both assisted and unassisted families; and 3) the owner charges the assisted family for late payment of the family's share of the rent. The PHA is not required to pay a late payment penalty if HUD determines that the payment is late for reasons beyond the PHA's control. In addition, late payment penalties are not required if the PHA intentionally delays or denies payment as a remedy to an owner breach of the HAP contract [HCV Guidebook p. 11-7].

The PHA must continue making housing assistance payments to the owner in accordance with the HAP contract as long as the tenant continues to occupy the unit and the HAP contract is not violated. HAP payments terminate when the HAP contract terminates or when the tenancy is terminated in accordance with the terms of the lease. If the owner has initiated eviction proceedings against the family and the family continues to reside in the unit, the PHA must continue to make housing assistance payments to the owner until the owner has obtained a court judgment or other process allowing the owner to evict the tenant.

13-II.D. BREACH OF HAP CONTRACT [24 CFR 982.453]

Any of the following actions by the owner constitutes a breach of the HAP contract:

• If the owner violates any obligations under the HAP contract including failure to maintain the

unit in accordance with housing quality standards

• If the owner has violated any obligation under any other HAP contract under Section 8
• If the owner has committed fraud, bribery or any other corrupt or criminal act in connection

with any federal housing program

• For projects with mortgages insured by HUD or loans made by HUD, if the owner has failed

to comply with the regulation for the applicable program; or if the owner has committed fraud, bribery or any other corrupt or criminal act in connection with the mortgage or loan

• If the owner has engaged in drug-related criminal activity
• If the owner has committed any violent criminal activity

If the PHA determines that a breach of the HAP contract has occurred, the PHA must take enforcement action in accordance with 24 CFR 982.404. The PHA rights and remedies against the owner under the HAP contract include recovery of any HAP overpayment, withholding or abatement of housing assistance payments, abatement or reduction of the housing assistance payment, termination of the payment or termination of the HAP contract. The PHA may also obtain additional relief by judicial order or action.

The PHA must notify the owner of its determination and provide in writing the reasons for the determination. The notice may require the owner to take corrective action by an established deadline. The PHA must provide the owner with written notice of any reduction in housing assistance payments or the termination of the HAP contract.

13-II.E. HAP CONTRACT TERM AND TERMINATIONS

The term of the HAP contract runs concurrently with the term of the dwelling lease [24 CFR 982.451(a)(2)], beginning on the first day of the initial term of the lease and terminating on the last day of the term of the lease, including any lease term extensions. The HAP contract and the housing assistance payments made under the HAP contract terminate if [HCV Guidebook pp.11-4 and 11-5, pg. 15-3]:

• The owner or the family terminates the lease
• The lease expires
• The PHA terminates the HAP contract
• The PHA terminates assistance for the family
• The family moves from the assisted unit. In this situation, the owner is entitled to keep the

housing assistance payment for the month when the family moves out of the unit.

• 180 calendar days have elapsed since the PHA made the last housing assistance payment to

the owner

• The family is absent from the unit for longer than the maximum period permitted by the PHA
• The Annual Contributions Contract (ACC) between the PHA and HUD expires
• The PHA elects to terminate the HAP contract.

The unit does not meet housing quality standards [24 CFR 982.404] – see Chapter 8; The family breaks up [HUD Form 52641] – see Chapter 3; The owner breaches the HAP contract [24 CFR 982.453(b)] – see Section 13-II.D.

If the PHA terminates the HAP contract, the PHA must give the owner and the family written notice. The notice must specify the reasons for the termination and the effective date of the termination. Once a HAP contract is terminated, no further HAP payments may be made under that contract [HCV Guidebook pg.15-4].

13-II.F. CHANGE IN OWNERSHIP / ASSIGNMENT OF THE HAP CONTRACT

[HUD-52641] The HAP contract cannot be assigned to a new owner without the prior written consent of the PHA. An owner under a HAP contract must notify the PHA in writing prior to a change in the legal ownership of the unit. The owner must supply all information as requested by the PHA. Prior to approval of assignment to a new owner, the new owner must agree to be bound by and comply with the HAP contract. The agreement between the new owner and the former owner must be in writing and in a form that the PHA finds acceptable. The new owner must provide the PHA with a copy of the executed agreement.

Within ten (10) business days of receiving the owner's request, the Authority will inform the current owner in writing whether the assignment may take place. The new owner must provide a written certification to the Authority that includes: A copy of the escrow statement or other document showing the transfer of title and recorded deed; A copy of the owner's IRS Form W-9, Request for Taxpayer Identification Number and Certification, or the social security number of the new owner; The effective date of the HAP contract assignment; A written agreement to comply with the terms of the HAP contract; and A certification that the new owner is not a prohibited relative. If the new owner does not agree to an assignment of the HAP contract, or fails to provide the necessary documents, the Authority will terminate the HAP contract with the old owner. If the new owner wants to offer the family a new lease, and the family elects to stay with continued assistance, the Authority will process the leasing in accordance with the policies in Chapter 9.

13-II.G. FORECLOSURE [Notice PIH 2010-49]

Families receiving HCV assistance are entitled to certain protections set forth under the Protecting Tenants at Foreclosure Act (PTFA). During the term of the lease, the new owner of the property does not have good cause to terminate the tenant's lease, unless the new owner will occupy the unit as their primary residence and has provided the tenant with at least a 90-day notice. In that case, the lease may be terminated effective on the date of sale, although the tenant is still entitled to a 90-day notice to vacate. Further, the new owner assumes interest in the lease between the prior owner and the tenant and to the HAP contract. Any state or local law that provides longer time periods or other additional protections for tenants also applies.

an action or inaction by the new owner that prevents such payments (e.g., rejection of payments or failure to maintain the property according to housing quality standards), or due to an inability to identify the new owner, the Authority will either use the funds to pay: The utilities that are the owner's responsibility after taking reasonable steps to notify the owner; except that if the unit has been or will be rendered uninhabitable due to termination or threat of termination of service, prior notice is not required. In the latter case, the Authority shall notify the owner within a reasonable time after making the utility payment; or For the family's reasonable moving costs, including security deposit costs. The Authority will also refer the tenant, as needed, to the local legal aid office in order to ensure adequate protection of the tenant's rights and enforcement of the successor in interest's performance under the HAP contract. See Section 12-III.B for a discussion of foreclosure as it pertains to owner termination of tenancy.

PROGRAM INTEGRITY

INTRODUCTION The PHA is committed to ensuring that subsidy funds made available to the PHA are spent in accordance with HUD requirements. This chapter covers HUD and PHA policies designed to prevent, detect, investigate, and resolve instances of program abuse or fraud. It also describes the actions that will be taken in the case of unintentional errors and omissions. Part I: Preventing, Detecting, and Investigating Errors and Program Abuse. This part presents PHA policies related to preventing, detecting, and investigating errors and program abuse.

Part II: Corrective Measures and Penalties. This part describes the corrective measures the PHA must and may take when errors or program abuses are found.

Page 14-1

PART I: PREVENTING, DETECTING, AND

INVESTIGATING ERRORS AND PROGRAM ABUSE

14-I.A. PREVENTING ERRORS AND PROGRAM ABUSE

HUD created the Enterprise Income Verification (EIV) system to provide PHAs with a powerful tool for preventing errors and detecting program abuse. PHAs are required to use the EIV system at annual reexamination in accordance with HUD administrative guidance [24 CFR 5.233]. PHAs are further required to:

• Provide applicants and participants with form HUD-52675, "Debts Owed to PHAs and
• Require all adult members of an applicant or participant family to acknowledge receipt of

form HUD-52675 by signing a copy of the form for retention in the family file

Page 14-2

For purposes of this chapter the term error refers to an unintentional error or omission. Program abuse or fraud refers to a single act or pattern of actions that constitute a false statement, omission, or concealment of a substantial fact, made with the intent to deceive or mislead.

14-I.B. DETECTING ERRORS AND PROGRAM ABUSE

In addition to taking steps to prevent errors and program abuse, the PHA will use a variety of activities to detect errors and program abuse. Quality Control and Analysis of Data Under the Section 8 Management Assessment Program (SEMAP), HUD requires the PHA to review a random sample of tenant records annually to determine if the records conform to program requirements and to conduct quality control inspections of a sample of units to ensure compliance with applicable housing quality standards [24 CFR, Part 985]. (See Chapter 16 for additional information about SEMAP requirements).

Page 14-3

14-I.C. INVESTIGATING ERRORS AND PROGRAM ABUSE

When the PHA Will Investigate

Page 14-4

Consideration of Remedies All errors and instances of program abuse must be corrected prospectively. Whether the PHA will enforce other corrective actions and penalties depends upon the nature of the error or program abuse.

Page 14-5

Part Ii: Corrective Measures And Penalties

14-II.A. SUBSIDY UNDER- OR OVERPAYMENTS

A subsidy under- or overpayment includes (1) an incorrect housing assistance payment to the owner, (2) an incorrect family share established for the family, and (3) an incorrect utility reimbursement to a family. Corrections Whether the incorrect subsidy determination is an overpayment or underpayment of subsidy, the PHA must promptly correct the HAP, family share, and any utility reimbursement prospectively.

14-II.B. FAMILY-CAUSED ERRORS AND PROGRAM ABUSE

Family obligations and general administrative requirements for participating in the program are discussed throughout this plan. This section deals specifically with errors and program abuse by family members. An incorrect subsidy determination caused by a family generally would be the result of incorrect reporting of family composition, income, assets, or expenses, but also would include instances in which the family knowingly allows the PHA to use incorrect information provided by a third party. Family Reimbursement to PHA [HCV GB pp. 22-12 to 22-13]

Page 14-6

Prohibited Actions An applicant or participant in the HCV program must not knowingly:

• Make a false statement to the PHA [Title 18 U.S.C. Section 1001].
• Commit fraud, bribery, or any other corrupt or criminal act in connection with any federal

housing program [24 CFR 982.552(c)(iv)].

• The PHA may require the family to repay excess subsidy amounts paid by the PHA, as

described earlier in this section.

• The PHA may require, as a condition of receiving or continuing assistance, that a culpable

family member not reside in the unit. See policies in Chapter 3 (for applicants) and Chapter 12 (for participants).

• The PHA may deny or terminate the family's assistance following the policies set forth in

Chapter 3 and Chapter 12 respectively.

• The PHA may refer the family for state or federal criminal prosecution as described in

section 14-II.E.

Page 14-7

14-II.C. OWNER-CAUSED ERROR OR PROGRAM ABUSE

Owner requirements that are part of the regular process of offering, leasing, and maintaining a unit (e.g., housing quality standards compliance, fair housing) are addressed in the appropriate chapters of this plan. This section focuses on errors and program abuse by owners. An incorrect subsidy determination caused by an owner generally would be the result of an incorrect owner statement about the characteristics of the assisted unit (e.g., the number of bedrooms, which utilities are paid by the family). It also includes accepting duplicate housing assistance payments for the same unit in the same month, or after a family no longer resides in the unit. Owner Reimbursement to the PHA In all cases of overpayment of subsidy caused by the owner, the owner must repay to the PHA any excess subsidy received. The PHA may recover overpaid amounts by withholding housing assistance payments due for subsequent months, or if the debt is large, the PHA may allow the owner to pay in installments over a period of time [HCV GB p. 22-13].

• Make any false statement to the PHA [Title 18 U.S.C. Section 1001].
• Commit fraud, bribery, or any other corrupt or criminal act in connection with any federal

housing program [24 CFR 982.453(a)(3)] including:

Page 14-8

Committing sexual or other harassment, either quid pro quo or hostile environment, based on the protected classes defined in Chapter 2 Retaliating against any applicant or participant reporting/alleging sexual or other harassment, either quid pro quo or hostile environment, based on the protected classes defined in Chapter 2 Remedies and Penalties When the PHA determines that the owner has committed program abuse, the PHA may take any of the following actions:

• Require the owner to repay excess housing assistance payments, as discussed earlier in this

section and in accordance with the policies in Chapter 16.

• Terminate the HAP contract (See Chapter 13).
• Bar the owner from future participation in any PHA programs.

• Refer the case to state or federal officials for criminal prosecution as described in section

14-II.E.

14-II.D. PHA-CAUSED ERRORS OR PROGRAM ABUSE

The responsibilities and expectations of PHA staff with respect to normal program administration are discussed throughout this plan. This section specifically addresses actions of a PHA staff member that are considered errors or program abuse related to the HCV program. Additional standards of conduct may be provided in the PHA personnel policy. PHA-caused incorrect subsidy determinations include (1) failing to correctly apply HCV rules regarding family composition, income, assets, and expenses, (2) assigning the incorrect voucher size to a family, and (3) errors in calculation. De Minimis Errors [24 CFR 5.609(c)(4)] The PHA will not be considered out of compliance when making annual income determinations solely due to de minimis errors in calculating family income. A de minimis error is an error where the PHA determination of family income deviates from the correct income determination by no more than $30 per month in monthly adjusted income ($360 in annual adjusted income) per family. PHAs must take corrective action to credit or repay a family if the family was overcharged rent, including when PHAs make de minimis errors in the income determination. Families will not be required to repay the PHA in instances where the PHA miscalculated income resulting in a family being undercharged for rent. PHAs state in their policies how they will repay or credit a family the amount they were overcharged as a result of the PHA's de minimis error in income determination.

Page 14-9

Prohibited Activities

14-II.E. CRIMINAL PROSECUTION

14-II.F. FRAUD AND PROGRAM ABUSE RECOVERIES

The PHA may retain a portion of program fraud losses that the PHA recovers from a family or owner through litigation, court order, or a repayment agreement [24 CFR 982.163]. The PHA must be the principal party initiating or sustaining the action to recover amounts due from tenants that are due as a result of fraud and abuse. 24 CFR 792.202 permits the PHA to retain the greater of:

• 50 percent of the amount it actually collects from a judgment, litigation (including settlement

of a lawsuit) or an administrative repayment agreement, or

• Reasonable and necessary costs that the Authority incurs related to the collection including

costs of investigation, legal fees, and agency collection fees.

Page 14-10

The family must be afforded the opportunity for an informal hearing in accordance with requirements in 24 CFR 982.555. If HUD incurs costs on behalf of the PHA related to the collection, these costs must be deducted from the amount retained by the PHA.

Page 14-11

SPECIAL HOUSING TYPES

[24 CFR 982 Subpart M; New HCV GB, Special Housing Types]

INTRODUCTION The PHA may permit a family to use any of the special housing types discussed in this chapter. However, the PHA is not required to permit families receiving assistance in its jurisdiction to use these housing types, except that PHAs must permit use of any special housing type if needed as a reasonable accommodation for a person with a disability, and the PHA must permit a family to lease a manufactured home and space with assistance under the program. The PHA also may limit the number of families who receive HCV assistance in these housing types and cannot require families to use a particular housing type. No special funding is provided for special housing types. Unless specifically modified by the regulations, housing quality standards apply to special housing types (Single Room Occupancy, Congregate Housing, Group Homes, Shared Housing, Manufactured Homes, Homeownership units) [Notice PIH 2023-28].

This chapter consists of the following seven parts. Each part contains a description of the housing type and any special requirements associated with it. Except as modified by this chapter, the general requirements of the HCV program apply to special housing types. Part I: Single Room Occupancy Part II: Congregate Housing Part III: Group Homes Part IV: Shared Housing Part V: Cooperative Housing Part VI: Manufactured Homes (including manufactured home space rental) Part VII: Homeownership

PART I: SINGLE ROOM OCCUPANCY

[24 CFR 982.602 through 982.605; Form HUD-52641; New HCV GB,

15-I.A. OVERVIEW

A single room occupancy (SRO) unit provides living and sleeping space for the exclusive use of the occupant but requires the occupant to share sanitary and/or food preparation facilities with others. More than one person may not occupy an SRO unit. HCV regulations do not limit the number of units in an SRO facility, but the size of a facility may be limited by local ordinances. When providing HCV assistance in an SRO unit, a separate lease and HAP contract are executed for each assisted person. The standard form of the HAP contract is used (form HUD-52641) with the special housing type specified in Part A of the HAP contract, as follows: "This HAP contract is used for the following special housing type under HUD regulations for the Section 8 voucher program: Single room occupancy (SRO) housing."

15-I.B. PAYMENT STANDARD, UTILITY ALLOWANCE, AND HAP CALCULATION

The payment standard for SRO housing is 75 percent of the zero-bedroom payment standard amount on the PHA's payment standard schedule. The utility allowance for an assisted person residing in SRO housing is 75 percent of the zero- bedroom utility allowance. The HAP for an assisted occupant in an SRO facility is the lower of the SRO payment standard amount minus the TTP or the gross rent for the unit minus the TTP.

15-I.C. SRO: HOUSING QUALITY STANDARDS [24 CFR 982.605(a)]

Housing quality standards requirements described in the applicable portions of Chapter 8 apply to SRO housing except that sanitary facilities, and space and security characteristics must meet local code standards for SRO housing. In the absence of applicable local code standards for SRO housing, the following standards apply:

• Access: Access doors to the SRO unit must have working locks for privacy. The occupant

must be able to access the unit without going through any other unit. Each unit must have immediate access to two or more approved means of exit from the building, appropriately marked and leading to safe and open space at ground level. The SRO unit must also have any other means of exit required by State or local law.

• Fire Safety: All SRO facilities must have a sprinkler system that protects major spaces.

"Major spaces" are defined as hallways, large common areas, and any other areas specified in local fire, building, or safety codes. SROs must also have hard-wired smoke detectors, and any other fire and safety equipment required by state or local law.

Sanitary facilities and space and security standards must meet local code requirements for SRO housing. In the absence of local code standards, the requirements discussed below apply [24 CFR 982.605]. Sanitary Facilities: At least one flush toilet that can be used in privacy, a lavatory basin, and a bathtub or shower in proper operating condition must be provided for each six persons (or fewer) residing in the SRO facility. If the SRO units are leased only to males, flush urinals may be substituted for up to one half of the required number of toilets. Sanitary facilities must be reasonably accessible from a common hall or passageway to all persons sharing them and may not be located more than one floor above or below the SRO unit. They may not be located below grade unless the SRO units are located on that level.

• Space and Security: An SRO unit must contain at least 110 square feet of floor space, and at

least four square feet of closet space with an unobstructed height of at least five feet, for use by the occupant. If the closet space is less than four square feet, the habitable floor space in the SRO unit must be increased by the amount of the deficiency. Exterior doors and windows accessible from outside the SRO unit must be lockable. For SRO housing, 24 CFR 5.703(d) only applies to the extent that the SRO unit contains the room or facility referenced in 24 CFR 5.703(d). Because no children live in SRO housing, the housing quality standards applicable to lead-based paint do not apply.

PART II: CONGREGATE HOUSING

[24 CFR 982.606 through 982.609; Form HUD-52641; New HCV GB,

15-II.A. OVERVIEW

Congregate housing is intended for use by elderly persons or persons with disabilities. A congregate housing facility contains a shared central kitchen and dining area and a private living area for the individual household that includes at least a living room, bedroom and bathroom. Food service for residents must be provided. If approved by the PHA, a family member or live-in aide may reside with the elderly person or person with disabilities. The PHA must approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. When providing HCV assistance in congregate housing, a separate lease and HAP contract are executed for each assisted family. The standard form of the HAP contract is used (form HUD- 52641) with the special housing type specified in Part A of the HAP contract, as follows: "This HAP contract is used for the following special housing type under HUD regulations for the Section 8 voucher program: Congregate housing."

15-II.B. PAYMENT STANDARD, UTILITY ALLOWANCE, AND HAP CALCULATION

The payment standard for an individual unit in a congregate housing facility is based on the number of rooms in the private living area for the assisted family. If there is only one room in the unit (not including the bathroom or the kitchen, if a kitchen is provided), the PHA must use the payment standard for a zero-bedroom unit. If the unit has two or more rooms (other than the bathroom and the kitchen), the PHA must use the one-bedroom payment standard. The HAP for an assisted occupant in a congregate housing facility is the lower of the applicable payment standard minus the TTP or the gross rent for the unit minus the TTP. The gross rent for the unit for the purpose of calculating HCV assistance is the shelter portion (including utilities) of the resident's monthly housing expense only. The residents' costs for food service should not be included in the rent for a congregate housing unit.

15-II.C. CONGREGATE: HOUSING QUALITY STANDARDS

Housing quality standards requirements as described in Chapter 8 apply to congregate housing except for the requirements stated below. Congregate housing is not subject to the requirement that the dwelling unit must have a kitchen area. In place of the housing quality standards related to food preparation and refuse disposal, congregate housing must have a refrigerator of appropriate size in the private living area of each resident, a central kitchen and dining facilities located within the premises and accessible to the residents, and food service for the residents, that is not provided by the residents themselves. The congregate housing must contain adequate facilities and services for the sanitary disposal of food waste and refuse, including facilities for temporary storage where necessary.

The housing quality standards applicable to lead-based paint do not apply unless a child under the age of six is expected to reside in the unit.

PART III: GROUP HOME

[24 CFR 982.610 through 982.614; Form HUD-52641; New HCV GB,

15-III.A. OVERVIEW

A group home is a state-approved (licensed, certified, or otherwise approved in writing by the state) facility intended for occupancy by elderly persons and/or persons with disabilities. Except for live-in aides, all persons living in a group home, whether assisted or not, must be elderly persons or persons with disabilities. Persons living in a group home must not require continuous medical or nursing care. A group home consists of bedrooms for residents, which can be shared by no more than two people, and a living room, kitchen, dining area, bathroom, and other appropriate social, recreational, or community space that may be shared with other residents. No more than 12 persons may reside in a group home including assisted and unassisted residents and any live-in aides. If approved by the PHA, a live-in aide may live in the group home with a person with disabilities. The PHA must approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. When providing HCV assistance in a group home, a separate lease and HAP contract is executed for each assisted family. The standard form of the HAP contract is used (form HUD-52641) with the special housing type specified in Part A of the HAP contract, as follows: "This HAP contract is used for the following special housing type under HUD regulations for the Section 8 voucher program: Group home."

15-III.B. PAYMENT STANDARD, UTILITY ALLOWANCE, AND HAP

CALCULATION Unless there is a live-in aide, the family unit size (voucher size) for an assisted occupant of a group home must be zero- or one-bedroom. If there is a live-in aide, the aide must be counted in determining the household's unit size. The payment standard used to calculate the HAP is the lower of the payment standard for the family unit size or the pro rata share of the payment standard for the group home size. The pro rata share is calculated by dividing the number of persons in the assisted household by the number of persons (assisted and unassisted) living in the group home. The number of persons in the assisted household equals one assisted person plus any PHA-approved live-in aide. The HAP for an assisted occupant in a group home is the lower of the payment standard minus the TTP or the gross rent minus the TTP. The utility allowance for an assisted occupant in a group home is the pro rata share of the family unit size to the utility allowance for the group home.

The rents paid for participants residing in group homes are subject to generally applicable standards for rent reasonableness. The rent for an assisted person must not exceed the pro rata portion of the reasonable rent for the group home. In determining reasonable rent, the PHA must consider whether sanitary facilities and facilities for food preparation and service are common facilities or private facilities.

15-III.C. GROUP HOME: HOUSING QUALITY STANDARDS

The entire unit must comply with NSPIRE requirements described in Chapter 8, except for the standards that relate to sanitary facilities, food preparation and refuse disposal, space and security, structure and materials, and site and neighborhood as stated below.

• Sanitary Facilities: A group home must have at least one bathroom in the facility, with a

flush toilet that can be used in privacy, a fixed basin with hot and cold running water, and a shower or bathtub with hot and cold running water. A group home may contain private or common bathrooms. However, no more than four residents can be required to share a bathroom.

• Food Preparation and Service: Group home units must contain a kitchen and dining area

with adequate space to store, prepare, and serve food. The facilities for food preparation and service may be private or may be shared by the residents. The kitchen must contain a range, an oven, a refrigerator, and a sink with hot and cold running water. The sink must drain into an approvable public or private disposal system.

• Space and Security: Group homes must contain at least one bedroom of appropriate size for

every two people, and a living room, kitchen, dining area, bathroom, and other appropriate social, recreational, or community space that may be shared with other residents. Doors and windows accessible from outside the unit must be lockable.

• Structure and Material: To avoid any threat to the health and safety of the residents, group

homes must be structurally sound. Elevators must be in good condition. Group homes must be accessible to and usable by residents with disabilities.

• Site and Neighborhood: Group homes must be located in a residential setting. The site and

neighborhood should be reasonably free from disturbing noises and reverberations, and other hazards to the health, safety, and general welfare of the residents, and should not be subject to serious adverse conditions, such as: - Dangerous walks or steps - Instability - Flooding, poor drainage - Septic tank back-ups, sewage hazards - Mud slides - Abnormal air pollution - Smoke or dust - Excessive noise

- Vibrations or vehicular traffic - Excessive accumulations of trash - Vermin or rodent infestation, and - Fire hazards. The housing quality standards applicable to lead-based paint do not apply unless a child under the age of six is expected to reside in the unit.

PART IV: SHARED HOUSING

[24 CFR 982.615 through 982.618; Form HUD-52641; Notice PIH 2021-05; New HCV GB, Special Housing Types, p. 11]

15-IV.A. OVERVIEW

Families in markets with tight rental conditions or with a prevalence of single-family housing may determine a shared housing living arrangement to be a useful way to secure affordable housing. PHAs offering shared housing as a housing solution may also experienced some reduction in the average per-unit-cost (PUC) paid on behalf of assisted families. Shared housing is a single housing unit occupied by an assisted family and another resident or residents. The unit may be a house or an apartment. The shared unit consists of both common space for use by the occupants of the unit and separate private space for each assisted family. An assisted family may share a unit with other persons assisted under the HCV program or with other unassisted persons. Shared housing may be offered in a number of ways, including for-profit co-living (such as a boarding house, single bedroom with common living room/kitchen/dining room) run by a private company [Notice PIH 2021-05]. The owner of a shared housing unit may reside in the unit, but housing assistance may not be paid on behalf of the owner. The resident owner may not be related by blood or marriage to the assisted family. If approved by the PHA, a live-in aide may reside with the family to care for a person with disabilities. The PHA must approve a live-in aide if needed as a reasonable accommodation so that the program is readily accessible to and usable by persons with disabilities. When shared housing is offered as a housing option, HUD encourages PHAs to consider ways in which the families may be assisted in finding shared housing, including for-profit shared housing matching (such as roommates or single-family homes) and online sites that charge a fee for their matching services, or nonprofit shared housing matching services. HUD further encourages PHAs to include information about this housing possibility in the family's voucher briefing.

PHAs should be aware of potential local legal barriers to HCV participants using shared housing, which can create additional obstacles for shared housing:

• Municipalities may have occupancy limits for the number of unrelated persons who may

share a housing unit.

• Local zoning codes for single family housing may restrict occupancy in certain areas to

households whose family members are related by blood. PHAs should work with local jurisdictions to find solutions that encourage affordable housing and are consistent with the Fair Housing Act, Title VI, and other federal, state, and local fair housing laws. PHAs should inform HUD if they encounter barriers to shared housing that may conflict with fair housing laws.

15-IV.B. PAYMENT STANDARD, UTILITY ALLOWANCE AND HAP CALCULATION

The payment standard for a family in shared housing is the lower of the payment standard for the family unit size (voucher size) or the pro rata share of the payment standard for the shared housing unit size. The pro rata share is calculated by dividing the number of bedrooms available for occupancy by the assisted family in the private, non-shared space by the total number of bedrooms in the unit. Example: Family holds a two-bedroom voucher. Shared housing unit size: bedrooms available to assisted family = 2 Total bedrooms in the unit: 3 2 Bedrooms for assisted family ÷ 3 Bedrooms in the unit .667 pro rata share 2 BR payment standard: $1200 3 BR payment standard: $1695 $1695 x .667 (pro rata share) = $1131 $1131 is lower than the $1200 payment standard for the 2 BR family unit size $1131 is the payment standard used to calculate the HAP

The HAP for a family in shared housing is the lower of the payment standard minus the TTP or the gross rent minus the TTP. The utility allowance for an assisted family living in shared housing is the pro rata share of the utility allowance for the shared housing unit.

Example: A family holds a 2-bedroom voucher. The family decides to occupy 3 out of 4 bedrooms available in the unit. The utility allowance for a 4-bedroom unit equals $200 The utility allowance for a 2-bedroom unit equals $100 The pro rata share of the utility allowance is $150 (3/4 of $200) The PHA will use the 2-bedroom utility allowance of $100. The rents paid for families living in shared housing are subject to generally applicable standards for rent reasonableness. The rent paid to the owner for the assisted family must not exceed the pro rata portion of the reasonable rent for the shared unit. In determining reasonable rent, the PHA may consider whether sanitary and food preparation areas are private or shared.

15-IV.C. SHARED HOUSING: HOUSING QUALITY STANDARDS

The PHA may not give approval to reside in shared housing unless the entire unit, including the portion of the unit available for use by the assisted family under its lease, meets the housing quality standards. Housing quality standards requirements described in Chapter 8 apply to shared housing except for the requirements stated below.

• Facilities Available for the Family: Facilities available to the assisted family, whether shared

or private, must include a living room, a bathroom, and food preparation and refuse disposal facilities.

• Space and Security: The entire unit must provide adequate space and security for all assisted

and unassisted residents. The private space for each assisted family must contain at least one bedroom for each two persons in the family. The number of bedrooms in the private space of an assisted family must not be less than the family unit size (voucher size). A zero-bedroom or one-bedroom unit may not be used for shared housing.

PART V: COOPERATIVE HOUSING

[24 CFR 982.619; New HCV GB, Special Housing Types, p. 14]

15-V.A. OVERVIEW

This part applies to rental assistance for a cooperative member residing in cooperative housing. It does not apply to assistance for a cooperative member who has purchased membership under the HCV homeownership option, or to rental assistance for a family that leases a cooperative housing unit from a cooperative member. A cooperative is a form of ownership (nonprofit corporation or association) in which the residents purchase memberships in the ownership entity. Rather than being charged "rent" a cooperative member is charged a "carrying charge." The monthly carrying charge includes the member's share of the cooperative debt service, operating expenses, and necessary payments to cooperative reserve funds. It does not include down payments or other payments to purchase the cooperative unit or to amortize a loan made to the family for this purpose. The occupancy agreement or lease and other appropriate documents must provide that the monthly carrying charge is subject to Section 8 limitations on rent to owner, and the rent must be reasonable as compared to comparable unassisted units. When providing HCV assistance in cooperative housing, the standard form of the HAP contract is used with the special housing type specified in Part A of the HAP contract, as follows: "This HAP contract is used for the following special housing type under HUD regulations for the Section 8 voucher program: Cooperative housing."

15-V.B. PAYMENT STANDARD, UTILITY ALLOWANCE AND HAP CALCULATION

The payment standard and utility allowance are determined according to regular HCV program requirements. The HAP for a cooperative housing unit is the lower of the payment standard minus the TTP or the gross rent (monthly carrying charge for the unit, plus any utility allowance) minus the TTP. The monthly carrying charge includes the member's share of the cooperative debt service, operating expenses, and necessary payments to cooperative reserve funds. The carrying charge does not include down payments or other payments to purchase the cooperative unit or to amortize a loan made to the family for this purpose.

15-V.C. COOPERATIVE: HOUSING QUALITY STANDARDS

All housing quality standard requirements apply to cooperative housing units. There are no additional requirements. The PHA remedies described in 24 CFR 982.404 do not apply. Rather, if the unit and premises are not maintained in accordance with housing quality standards, the PHA may exercise all available remedies regardless of whether the family or cooperative is responsible for the breach of housing quality standards. No housing assistance payment can be made unless unit meets housing quality standards and the defect is corrected within the period as specified by the PHA and the PHA verifies correction (see Chapter 8). In addition to regular deficiencies, breaches of housing quality standards by the family include failure to perform any maintenance for which the family is responsible in accordance with the terms of the cooperative occupancy agreement [HCV GB].

PART VI: MANUFACTURED HOMES

[24 CFR 982.620 through 982.624; FR Notice 1/18/17; New HCV GB,

15-VI.A. OVERVIEW

A manufactured home is a manufactured structure, transportable in one or more parts, that is built on a permanent chassis, and designed for use as a principal place of residence. HCV- assisted families may occupy manufactured homes in three different ways. (1) A family may choose to rent a manufactured home already installed on a space and the PHA must permit it. In this instance program rules are the same as when a family rents any other residential housing, except that there are special housing quality requirements as provided in

15-VI.D. below.

(2) A family can purchase a manufactured home under the Housing Choice Voucher Homeownership program. (3) HUD also permits an otherwise eligible family that owns a manufactured home to rent a space for the manufactured home and receive HCV assistance with the rent for the space as well as certain other housing expenses. PHAs may, but are not required to, provide assistance for such families.

15-VI.B. SPECIAL REQUIREMENTS FOR MANUFACTURED HOME OWNERS WHO

LEASE A SPACE Family Income In determining the annual income of families leasing manufactured home spaces, the value of the family's equity in the manufactured home in which the family resides is not counted as a family asset. Lease and HAP Contract There is a designated HAP Contract (form HUD-52642) and designated Tenancy Addendum (form HUD 52642-A) for this special housing type.

15-VI.C. PAYMENT STANDARD, UTILITY ALLOWANCE AND HAP CALCULATION

Payment Standards The PHA payment standard for manufactured homes is determined in accordance with 24 CFR 982.505 and is the payment standard used for the PHA's HCV program. It is based on the applicable FMR for the area in which the manufactured home space is located. The payment standard for the family is the lower of the family unit size (voucher size) or the payment standard for the number of bedrooms in the manufactured home. Utility Allowance [24 CFR 982.624] The PHA must establish utility allowances for manufactured home space rental. For the first 12 months of the initial lease term only, the allowance must include a reasonable amount for a utility hook-up charge if the family actually incurred a hook-up charge because of a move. This

allowance will not be given to a family that leases in place. Utility allowances for manufactured home space must not include the costs of digging a well or installing a septic system.

Space Rent [24 CFR 982.622]

• Rent to owner for rental of a manufactured home space includes payment for maintenance

and services that the owner must provide to the tenant under the lease for the space. Rent to owner does not include the costs of utilities and trash collection for the manufactured home. However, the owner may charge the family a separate fee for the cost of utilities or trash collection provided by the owner. Amortization Costs The monthly payment made by the family to amortize the cost of purchasing the manufactured home is the debt service established at the time of application to a lender for financing the purchase of the manufactured home if monthly payments are still being made. Any increase in debt service due to refinancing after purchase of the home may not be included in the amortization cost. Debt service for set-up charges incurred by a family may be included in the monthly amortization payments made by the family. In addition, set-up charges incurred before the family became an assisted family may be included in the amortization cost if monthly payments are still being made to amortize the charges. Housing Assistance Payment [24 CFR 982.623(a)] The HAP for a manufactured home space under the housing choice voucher program is the lower of the payment standard minus the TTP or the family's eligible housing expenses minus the TTP. Eligible Housing Expenses [24 CFR 982.623(b)] The family's eligible housing expenses are the total of:

• The rent charged by the owner for the manufactured home space.
• Charges for the maintenance and management the space owner must provide under the lease.
• The monthly payments made by the family to amortize the cost of purchasing the

manufactured home established at the time of application to a lender for financing the purchase of the manufactured home if monthly payments are still being made, including any required insurance and property taxes included in the loan payment to the lender. - Any increase in debt service or term due to refinancing after purchase of the home may not be included in the amortization cost. - Debt service for installation charges incurred by a family may be included in the monthly amortization payments. Installation charges incurred before the family became an assisted family may be included in the amortization cost if monthly payments are still being made to amortize the charges. The applicable allowances for tenant-paid utilities, as determined under 24 CFR 982.517 and 982.624.Rent Reasonableness [24 CFR 982.622(b)] During the assisted tenancy, the rent to owner for the manufactured home space may not exceed a reasonable rent. Initially, and at least annually thereafter, the PHA must determine that the rent

for the manufactured home space is reasonable based on rents for comparable manufactured home spaces. The PHA must consider the location and size of the space, and any services and maintenance to be provided by the owner in accordance with the lease (without a fee in addition to rent). By accepting the monthly housing assistance payment, the owner of the manufactured home space certifies that the rent does not exceed rents charged by the owner for comparable unassisted spaces in the same manufactured home park or elsewhere. If requested by the PHA, the owner must give the PHA information on rents charged by the owner for other manufactured home spaces. Distribution of HAP [24 CFR 982.623(c)] The PHA pays the owner of the space the lesser of the housing assistance payment or the portion of the monthly rent due to the owner. The portion of the monthly rent due to the owner is the total of:

• The actual rent charged by the owner for the manufactured home space; and
• Charges for the maintenance and management the space owner must provide under the lease.

If the housing assistance payment exceeds the portion of the monthly rent due to the owner, the PHA may pay the balance of the housing assistance payment to the family. Alternatively, the PHA may pay the balance to the lender or utility company, in an amount no greater than the amount due for the month to each, respectively, subject to the lender's or utility company's willingness to accept the PHA's payment on behalf of the family.

15-VI.D. MANUFACTURED HOMES: HOUSING QUALITY STANDARDS

[24 CFR 982.621] Under either type of occupancy described in 15-VI.A. above, the manufactured home must meet all housing quality standards performance requirements and acceptability criteria discussed in Chapter 8 of this plan. In addition, the following requirement apply: Performance Requirement: A manufactured home must be placed on the site in a stable manner and must be free from hazards such as sliding or wind damage.

Acceptability Criteria: The home must be securely anchored by a tie-down device that distributes and transfers the loads imposed by the unit to appropriate ground anchors to resist overturning and sliding.

PART VII: HOMEOWNERSHIP

[24 CFR 982.625 through 982.643]

15-VII.A. OVERVIEW [24 CFR 982.625]

The homeownership option is used to assist a family residing in a home purchased and owned by one or more members of the family. A family assisted under this option may be newly admitted or an existing participant in the HCV program. The PHA must have the capacity to operate a successful HCV homeownership program as defined by the regulations.

15-VII.B. FAMILY ELIGIBILITY [24 CFR 982.627]

If the PHA offers the homeownership option, participation by the family is optional. However, the family must meet all of the requirements listed below before the commencement of homeownership assistance. The PHA may also establish additional initial requirements as long as they are described in the PHA administrative plan.

• The family must have been admitted to the Housing Choice Voucher program.
• The family must qualify as a first-time, homeowner, or may be a cooperative member.
• The family must meet the Federal minimum income requirement. The family must have a

gross annual income equal to the Federal minimum wage multiplied by 2000, based on the income of adult family members who will own the home. The PHA may establish a higher income standard for families. However, a family that meets the federal minimum income requirement (but not the PHA's requirement) will be considered to meet the minimum income requirement if it can demonstrate that it has been pre-qualified or pre-approved for financing that is sufficient to purchase an eligible unit.

• For disabled families, the minimum income requirement is equal to the current SSI monthly

payment for an individual living alone, multiplied by 12.

• For elderly or disabled families, welfare assistance payments for adult family members who

will own the home will be included in determining whether the family meets the minimum income requirement. It will not be included for other families.

• The family must satisfy the employment requirements by demonstrating that one or more

adult members of the family who will own the home at commencement of homeownership assistance is currently employed on a full-time basis (the term full-time employment means not less than an average of 30 hours per week); and has been continuously so employed during the year before commencement of homeownership assistance for the family.

• The employment requirement does not apply to elderly and disabled families. In addition, if a

family, other than an elderly or disabled family includes a person with disabilities, the PHA must grant an exemption from the employment requirement if the PHA determines that it is needed as a reasonable accommodation.

• The family has not defaulted on a mortgage securing debt to purchase a home under the

homeownership option

• Except for cooperative members who have acquired cooperative membership shares prior to

commencement of homeownership assistance, no family member has a present ownership interest in a residence at the commencement of homeownership assistance for the purchase of any home.

• Except for cooperative members who have acquired cooperative membership shares prior to

the commencement of homeownership assistance, the family has entered a contract of sale in accordance with 24 CFR 982.631(c).

15-VII.C. SELECTION OF FAMILIES [24 CFR 982.626]

Unless otherwise provided (under the homeownership option), the PHA may limit homeownership assistance to families or purposes defined by the PHA and may prescribe additional requirements for commencement of homeownership assistance for a family. Any such limits or additional requirements must be described in the PHA administrative plan. If the PHA limits the number of families that may participate in the homeownership option, the PHA must establish a system by which to select families to participate.

All families must meet eligibility requirements as defined in Section 15-VII.B. of this plan.

15-VII.D. ELIGIBLE UNITS [24 CFR 982.628]

In order for a unit to be eligible, the PHA must determine that the unit satisfies all of the following requirements:

• The unit must meet HUD's "eligible housing" requirements. The unit may not be any of the

following: - A public housing or Indian housing unit; - A unit receiving Section 8 project-based assistance; - A nursing home, board and care home, or facility providing continual psychiatric, medical or nursing services; - A college or other school dormitory; - On the grounds of penal, reformatory, medical, mental, or similar public or private institutions.

• The unit must be a one-unit property or a single dwelling unit in a cooperative or

condominium.

• The unit must have been inspected by the PHA and by an independent inspector designated

by the family.

• The unit must meet housing quality standards (see Chapter 8).
• For a unit where the family will not own fee title to the real property (such as a manufactured

home), the home must have a permanent foundation and the family must have the right to occupy the site for at least 40 years. Families may enter into contracts of sale for units not yet under construction. However, the PHA will not commence homeownership assistance for the family for that unit until: 1. Either the responsible entity completes the environmental review as required by 24 CFR part 58 and HUD approved the environmental certification and request for release of funds prior to commencement of construction or HUD performed an environmental review under 24 CFR part 50 and notified the PHA in writing of environmental approval of the site prior to construction commencement; and 2. Construction of the unit has been completed and the unit has passed the required inspection and independent inspection as addressed elsewhere in this chapter.

• For PHA-owned units (as defined in 24 CFR 982.4), all of the following conditions must be

satisfied: - The PHA informs the family, both orally and in writing, that the family has the right to purchase any eligible unit and a PHA-owned unit is freely selected by the family without PHA pressure or steering; - The unit is not ineligible housing;

- The PHA obtains the services of an independent entity (as defined in 24 CFR 982.4)to inspect the unit, review the independent inspection report, review the contract of sale, determine the reasonableness of the sales price and any PHA provided financing. All of these actions must be completed in accordance with program requirements. The PHA must not approve the unit if the PHA has been informed that the seller is debarred, suspended, or subject to a limited denial of participation.

15-VII.E. ADDITIONAL PHA REQUIREMENTS FOR SEARCH AND PURCHASE [24

CFR 982.629] It is the family's responsibility to find a home that meets the criteria for voucher homeownership assistance. The PHA may establish the maximum time that will be allowed for a family to locate and purchase a home and may require the family to report on their progress in finding and purchasing a home. If the family is unable to purchase a home within the maximum time established by the PHA, the PHA may issue the family a voucher to lease a unit or place the family's name on the waiting list for a voucher.

15-VII.F. HOMEOWNERSHIP COUNSELING [24 CFR 982.630]

Before commencement of homeownership assistance for a family, the family must attend and satisfactorily complete the pre-assistance homeownership and housing counseling program required by the PHA. HUD suggests the following topics for the PHA-required pre-assistance counseling:

• Home maintenance (including care of the grounds);
• Budgeting and money management;
• Credit counseling;
• How to negotiate the purchase price of a home;
• How to obtain homeownership financing and loan pre-approvals, including a description of

types of financing that may be available, and the pros and cons of different types of financing;

• How to find a home, including information about homeownership opportunities, schools, and

transportation in the PHA jurisdiction;

• Advantages of purchasing a home in an area that does not have a high concentration of low-

income families and how to locate homes in such areas;

• Information on fair housing, including fair housing lending and local fair housing

enforcement agencies; and

• Information about the Real Estate Settlement Procedures Act (12 U.S.C. 2601 et seq.)

(RESPA), state and Federal truth-in-lending laws, and how to identify and avoid loans with oppressive terms and conditions. The PHA may adapt the subjects covered in pre-assistance counseling (as listed) to local circumstances and the needs of individual families. The PHA may also offer additional counseling after commencement of homeownership assistance (ongoing counseling). If the PHA offers a program of ongoing counseling for participants in the homeownership option, the PHA shall have discretion to determine whether the family is required to participate in the ongoing counseling. Any homeownership counseling provided to families in connection with this section must be conducted by a HUD certified housing counselor working for an agency approved to participate in HUD's Housing Counseling Program.

15-VII.G. HOME INSPECTIONS, CONTRACT OF SALE, AND PHA DISAPPROVAL

OF SELLER [24 CFR 982.631] Home Inspections The PHA may not commence monthly homeownership assistance payments for a family until the PHA has inspected the unit and has determined that the unit meets housing quality standards.

Contract of Sale Before commencement of monthly homeownership assistance payments, a member or members of the family must enter into a contract of sale with the seller of the unit to be acquired by the family. The family must give the PHA a copy of the contract of sale. The contract of sale must:

• Specify the price and other terms of sale by the seller to the purchaser;
• Provide that the purchaser will arrange for a pre-purchase inspection of the dwelling unit by

an independent inspector selected by the purchaser;

• Provide that the purchaser is not obligated to purchase the unit unless the inspection is

satisfactory to the purchaser;

• Provide that the purchaser is not obligated to pay for any necessary repairs; and
• Contain a certification from the seller that the seller has not been debarred, suspended, or

subject to a limited denial of participation under 24 CFR part 24.

• A contract for the sale of a unit not yet under construction must meet all above requirements,

and requirements below. Commencement of construction in violation of the below requirements voids the purchase contract. - The purchaser is not obligated to purchase the unit unless an environmental review has been performed and the site received environmental approval prior to commencement of construction in accordance with 24 CFR 982.628; and - The construction will not commence until the environmental review has been completed and the seller has received written notice from the PHA that environmental approval has been obtained. Environmental approval may be conditioned on the contracting parties' agreement to modification to the unit design or to mitigation actions. Disapproval of a Seller In its administrative discretion, the PHA may deny approval of a seller for the same reasons a PHA may disapprove an owner under the regular HCV program [see 24 CFR 982.306(c)].

15-VII.H. FINANCING [24 CFR 982.632]

The PHA may establish requirements for financing purchase of a home under the homeownership option. This may include requirements concerning qualification of lenders, terms of financing, restrictions concerning debt secured by the home, lender qualifications, loan terms, and affordability of the debt. The PHA must establish policies describing these requirements in the administrative plan. A PHA may not require that families acquire financing from one or more specified lenders, thereby restricting the family's ability to secure favorable financing terms.

high interest rates, all of which are prohibited. The Authority also will not approve "seller financing" or "owner-held" mortgages. Beyond these basic criteria, the Authority will rely on the lenders to determine that the loan will be affordable to program participants. The mortgage the family applies for must require a minimum down payment of at least three percent of the sales price with one percent of the down payment coming from the purchaser's personal funds. The Authority will not require that the family have any more than the minimum of one percent of their own money in the transaction. However, in cases where a lender is requiring a larger amount, the family may be held to the underwriting guidelines set by their lending institution. The Authority will approve a family's request to utilize its Family Self-Sufficiency escrow account after final disbursement for down payment and/or closing costs when purchasing a unit under the HCV homeownership option.

15-VII.I. CONTINUED ASSISTANCE REQUIREMENTS; FAMILY OBLIGATIONS

[24 CFR 982.633] Homeownership assistance may only be paid while the family is residing in the home. If the family moves out of the home, the PHA may not continue homeownership assistance after the month when the family moves out. The family or lender is not required to refund to the PHA the homeownership assistance for the month when the family moves out. Before commencement of homeownership assistance, the family must execute a statement of family obligations in the form prescribed by HUD [form HUD-52649]. In the statement, the family agrees to comply with all family obligations under the homeownership option. The family must comply with the following obligations:

• The family must comply with the terms of the mortgage securing debt incurred to purchase

the home, or any refinancing of such debt.

• The family may not convey or transfer ownership of the home, except for purposes of

financing, refinancing, or pending settlement of the estate of a deceased family member. Use and occupancy of the home are subject to 24 CFR 982.551 (h) and (i).

• The family must supply information to the PHA or HUD as specified in 24 CFR 982.551(b).

The family must further supply any information required by the PHA or HUD concerning mortgage financing or refinancing, sale or transfer of any interest in the home, or homeownership expenses.

• The family must notify the PHA before moving out of the home.
• The family must notify the PHA if the family defaults on the mortgage used to purchase the

home.

• The family must provide the PHA with information on any satisfaction or payment of the

mortgage debt.

• No family member may have any ownership interest in any other residential property.

• The family must comply with the obligations of a participant family described in 24 CFR

982.551, except for the following provisions which do not apply to assistance under the homeownership option: 24 CFR 982.551(c), (d), (e), (f), (g) and (j).

15-VII.J. MAXIMUM TERM OF HOMEOWNER ASSISTANCE [24 CFR 982.634]

Except in the case of a family that qualifies as an elderly or disabled family, other family members (described below) shall not receive homeownership assistance for more than:

• Fifteen years, if the initial mortgage incurred to finance purchase of the home has a term of

20 years or longer; or

• Ten years, in all other cases.

The maximum term described above applies to any member of the family who:

• Has an ownership interest in the unit during the time that homeownership payments are

made; or

• Is the spouse of any member of the household who has an ownership interest in the unit

during the time homeownership payments are made. In the case of an elderly family, the exception only applies if the family qualifies as an elderly family at the start of homeownership assistance. In the case of a disabled family, the exception applies if at any time during receipt of homeownership assistance the family qualifies as a disabled family. If, during the course of homeownership assistance, the family ceases to qualify as a disabled or elderly family, the maximum term becomes applicable from the date homeownership assistance commenced. However, such a family must be provided at least 6 months of homeownership assistance after the maximum term becomes applicable (provided the family is otherwise eligible to receive homeownership assistance). If the family has received such assistance for different homes, or from different PHAs, the total of such assistance terms is subject to the maximum term described in this part.

15-VII.K. HOMEOWNERSHIP ASSISTANCE PAYMENTS AND HOMEOWNERSHIP

EXPENSES [24 CFR 982.635] The monthly homeownership assistance payment is the lower of: the voucher payment standard minus the total tenant payment, or the monthly homeownership expenses minus the total tenant payment. The payment standard amount may not be lower than what the payment standard amount was at commencement of homeownership assistance. In determining the amount of the homeownership assistance payment, the PHA will use the same payment standard schedule, payment standard amounts, and subsidy standards as those described elsewhere in this plan for the Housing Choice Voucher program. The payment standard for a family is the greater of (i) The payment standard as determined at the commencement of homeownership assistance for occupancy of the home, or (ii) the payment standard at the most recent regular reexamination of family income and composition since the commencement of homeownership assistance for occupancy of the home. The PHA must adopt policies for determining the amount of homeownership expenses to be allowed by the PHA in accordance with HUD requirements. Homeownership expenses (not including cooperatives) may only include amounts allowed by the PHA to cover:

• Principal and interest on initial mortgage debt, any refinancing of such debt, and any

mortgage insurance premium incurred to finance purchase of the home;

• Real estate taxes and public assessments on the home;
• Home insurance;
• The PHA allowance for maintenance expenses;
• The PHA allowance for costs of major repairs and replacements;
• The PHA utility allowance for the home;
• Principal and interest on mortgage debt incurred to finance costs for major repairs,

replacements or improvements for the home. If a member of the family is a person with disabilities, such debt may include debt incurred by the family to finance costs needed to make the home accessible for such person, if the PHA determines that allowance of such costs as homeownership expenses is needed as a reasonable accommodation so that the homeownership option is readily accessible to and usable by such person;

• Land lease payments where a family does not own fee title to the real property on which the

home is located [see 24 CFR 982.628(b)].

• For a condominium unit, condominium operating charges or maintenance fees assessed by

the condominium homeowner association.

Homeownership expenses for a cooperative member may only include amounts allowed by the PHA to cover:

• The cooperative charge under the cooperative occupancy agreement including payment for

real estate taxes and public assessments on the home;

• Principal and interest on initial debt incurred to finance purchase of cooperative membership

shares and any refinancing of such debt;

• Home insurance;
• The PHA allowance for maintenance expenses;
• The PHA allowance for costs of major repairs and replacements;
• The PHA utility allowance for the home; and
• Principal and interest on debt incurred to finance major repairs, replacements or

improvements for the home. If a member of the family is a person with disabilities, such debt may include debt incurred by the family to finance costs needed to make the home accessible for such person, if the PHA determines that allowance of such costs as homeownership expenses is needed as a reasonable accommodation so that the homeownership option is readily accessible to and usable by such person.

• Cooperative operating charges or maintenance fees assessed by the cooperative homeowner

association.

The PHA may pay the homeownership assistance payments directly to the family, or at the PHA's discretion, to a lender on behalf of the family. If the assistance payment exceeds the amount due to the lender, the PHA must pay the excess directly to the family.

15-VII.L. PORTABILITY [24 CFR 982.636, 982.637, 982.353(b) and (c), 982.552, 982.553]

Subject to the restrictions on portability included in HUD regulations and Authority policies, a family may exercise portability if the receiving PHA is administering a voucher homeownership program and accepting new homeownership families. The receiving PHA may absorb the family into its voucher program or bill the initial PHA. The family must attend the briefing and counseling sessions required by the receiving PHA. The receiving PHA will determine whether the financing for, and the physical condition of the unit, are acceptable. The receiving PHA must promptly notify the initial PHA if the family has purchased an eligible unit under the program, or if the family is unable to purchase a home within the maximum time established by the PHA.

15-VII.M. MOVING WITH CONTINUED ASSISTANCE [24 CFR 982.637]

A family receiving homeownership assistance may move with continued tenant-based assistance or with voucher homeownership assistance. The PHA must determine that all initial requirements have been satisfied if a family that has received homeownership assistance wants to move with continued homeownership assistance. However, the following do not apply:

• The requirement that a family must be a first-time homeowner is not applicable.
• The requirement for pre-assistance counseling is not applicable. However, the PHA may

require that the family complete additional counseling (before or after moving to a new unit with continued homeownership assistance). Continued tenant-based assistance for a new unit cannot begin so long as any family member holds title to the prior home. However, when the family or a member of the family is or has been the victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking, and the move is needed to protect the health or safety of the family or family member (or any family member has been the victim of a sexual assault that occurred on the premises during the 90-calendar-day period preceding the family's request to move), such family or family member may be assisted with continued tenant-based assistance even if they own any title or other interest in the prior home. The PHA may deny permission to move to a new unit with continued voucher assistance:

• If the PHA has insufficient funding to provide continued assistance.
• In accordance with 24 CFR 982.638, regarding denial or termination of assistance.
• In accordance with the PHA's policy regarding number of moves within a 12-month period.

The PHA must deny the family permission to move to a new unit with continued voucher rental assistance if:

• The family defaulted on an FHA-insured mortgage; and
• The family fails to demonstrate that the family has conveyed, or will convey, title to the

home, as required by HUD, to HUD or HUD's designee; and

• The family has moved, or will move, from the home within the period established or

approved by HUD.

15-VII.N. DENIAL OR TERMINATION OF ASSISTANCE [24 CFR 982.638]

At any time, the PHA may deny or terminate homeownership assistance in accordance with HCV program requirements in 24 CFR 982.552 (Grounds for denial or termination of assistance) or 24 CFR 982.553 (Crime by family members). The PHA may also deny or terminate assistance for violation of participant obligations described in 24 CFR Parts 982.551 or 982.633 and in accordance with its own policy, with the exception of failure to meet obligations under the Family Self-Sufficiency program as prohibited under the alternative requirements set forth in FR Notice 12/29/14. Homeownership assistance for a family automatically terminates 180 calendar days after the last homeownership assistance payment on behalf of the family. However, a PHA may grant relief from this requirement in those cases where automatic termination would result in extreme hardship for the family.

basis whether to grant relief from the requirement and for what period of time. In no case will the Authority postpone termination beyond an additional 90 days. The PHA must terminate voucher homeownership assistance for any member of family receiving homeownership assistance that is dispossessed from the home pursuant to a judgment or order of foreclosure on any mortgage (whether FHA insured or non-FHA) securing debt incurred to purchase the home, or any refinancing of such debt.

PROGRAM ADMINISTRATION

INTRODUCTION This chapter discusses administrative policies and practices that are relevant to the activities covered in this plan. The policies are discussed in seven parts as described below: Part I: Administrative Fee Reserve. This part describes the PHA's policies with regard to oversight of expenditures from its administrative fee reserve. Part II: Setting Program Standards and Schedules. This part describes what payment standards are, and how they are updated, as well as how utility allowances are established and revised. Part III: Informal Reviews and Hearings. This part outlines the requirements and procedures for informal reviews and hearings, and for informal hearings regarding citizenship status. Part IV: Owner or Family Debts to the PHA. This part describes policies for recovery of monies that the PHA has overpaid on behalf of families, or to owners, and describes the circumstances under which the PHA will offer repayment agreements to owners and families. Also discussed are the consequences for failure to make payments in accordance with a repayment agreement. Part V: Section 8 Management Assessment Program (SEMAP). This part describes what the SEMAP scores represent, how they are established, and how those scores affect a PHA. Part VI: Record-Keeping. All aspects of the program involve certain types of record- keeping. This part outlines the privacy rights of applicants and participants and record retention policies the PHA will follow. Part VII: Reporting and Record Keeping for Children with Elevated Blood Lead Level. This part describes the PHA's responsibilities for reporting, data collection, and record keeping relative to children with elevated blood lead levels that are less than six years of age, and are receiving HCV assistance. Part VIII: Determination of Insufficient Funding. This part describes the PHA's policies for determining if there is sufficient funding to issue vouchers, to approve moves to higher cost units or areas, and to continue assistance for all participant families. Part IX: Violence against Women Act (VAWA): Notification, Documentation, Confidentiality. This part contains key terms used in VAWA and describes requirements related to notifying families and owners about their rights and responsibilities under VAWA; requesting documentation from victims of domestic violence, dating violence, sexual assault, stalking, and human trafficking; and maintaining the confidentiality of information obtained from victims.

PART I: ADMINISTRATIVE FEE RESERVE [24 CFR 982.155]

The PHA will maintain administrative fee reserves, or unrestricted net position (UNP) for the program to pay program administrative expenses in excess of administrative fees paid by HUD for a PHA fiscal year. HUD appropriations acts beginning with FFY 2004 have specified that administrative fee funding may be used only for activities related to the provision of HCV assistance, including related development activities. Notice PIH 2012-9 cites two examples of related development activities: unit modification for accessibility purposes and development of project-based voucher units. The notice makes clear that other activities may also qualify as related development activities. Administrative fees that remain in the UNP account from funding provided prior to 2004 may be used for "other housing purposes permitted by state and local law," in accordance with 24 CFR 982.155(b)(1). In addition, as specified in Notice PIH 2022-18, PHAs may use administrative fee funding for both administrative and "other expenses" needed to employ strategies and undertake activities beyond regular administrative responsibilities to facilitate the successful leasing and use of housing choice vouchers by families, such as through the use of security deposit assistance and landlord recruitment and incentive payments, among other allowable expenses specified in the notice. PHAs are also permitted to use UNP for these expenses [Notice PIH 2022-18]. If a PHA has not adequately administered its HCV program, HUD may prohibit use of funds in the UNP Account and may direct the PHA to use funds in that account to improve administration of the program, for HCV HAP expenses, or to reimburse ineligible expenses in accordance with the regulation at 24 CFR 982.155(b)(3). HUD requires the PHA Board of Commissioners or other authorized officials to establish the maximum amount that may be charged against the UNP account without specific approval.

Part Ii: Setting Program Standards And Schedules

16-II.A. OVERVIEW

Although many of the program's requirements are established centrally by HUD, the HCV program's regulations recognize that some flexibility is required to allow the PHA to adapt the program to local conditions. This part discusses how the PHA establishes and updates certain schedules and standards that are used to administer the program locally. Details about how these schedules are applied to individual families are provided in other chapters. The schedules and standards discussed here include:

• Payment Standards, which dictate the maximum subsidy a family can receive (application of

the payment standards is discussed in Chapter 6); and

• Utility Allowances, which specify how a family's payment should be adjusted to account for

tenant-paid utilities (application of utility allowances is discussed in Chapter 6).

16-II.B. PAYMENT STANDARDS [24 CFR 982.503; HCV GB, Chapter 7; and Notice

PIH 2024-34] The payment standard sets the maximum subsidy payment a family can receive from the PHA each month [24 CFR 982.505(a)]. Payment standards are based on fair market rents (FMRs) published annually by HUD. FMRs are set at a percentile within the rent distribution of standard quality rental housing units in each FMR area. For most jurisdictions FMRs are set at the 40th percentile of gross rents in the market area. In the HCV program, the FMR may be established at the ZIP code level, metropolitan market area level, or nonmetropolitan county level. Within each FMR area, the applicable FMR is the HUD-published:

• Small Area FMR (SAFMR);

- For any metropolitan area designated as an SAFMR area; or - Anywhere a PHA has notified HUD it will voluntarily use SAFMRs;

• Metropolitan FMR for any other metropolitan area; or

FMR for any other non-metropolitan county. The PHA must establish a payment standard schedule that establishes payment standard amounts for each FMR area within the PHA's jurisdiction, and for each unit size within each of the FMR

areas. . In many cases a single FMR area will cover the PHA'sentire jurisdiction. Some PHAs' jurisdictions include more than one FMR area. The PHA's established payment standards within the payment standard area always must be within the basic range of the applicable FMR area, or any HUD-approved exception payment standard. Program regulations and this policy refer to the "applicable FMR." The "applicable FMR" is the HUD-published SAFMR for PHAs in mandatory SAFMR areas or for those PHAs that have opted-in to using the SAFMR, both of which are discussed below. Small Area FMR PHAs (Mandatory and Opt-In) [Notice PIH 2018-01; Notice PIH 2023-32; Notice PIH 2024-34; and Implementing Small Area Fair Market Rents (SAFMR) Guidebook] SAFMRs are FMRs calculated at the ZIP Code level, rather than for an entire metropolitan or non-metropolitan county. HUD identifies which metropolitan areas are required to use SAFMRs based on significant voucher concentration challenges and market conditions. PHAs administering the HCV program in those areas are required to use the SAFMRs when establishing payment standards (mandatory SAFMR PHAs). Mandatory SAFMR PHAs must use the SAFMR for any part of their jurisdiction located in the SAFMR area. Upon notification to HUD, PHAs not located in mandatory SAFMR areas may opt-in and voluntarily adopt SAFMRs for one or more of the FMR areas in which the PHA administers vouchers (opt-in PHAs). A PHA that exercises this option in one metropolitan area or non- metropolitan county is not required to exercise this option in other metropolitan areas or non- metropolitan counties. A PHA that opts in to SAFMRs may subsequently opt out through revision of the administrative plan and notification to HUD. Alternatively, PHAs may elect to use SAFMRs only as the basis for exception payment standards in some or all of those non-mandatory SAFMR areas that cover or are within their jurisdictions. These PHAs are not considered opt-in PHAs. When applicable, SAFMRs apply to all tenant-based vouchers in the PHA's jurisdiction, including special vouchers such as the Veterans Affairs Supportive Housing (VASH) program, the Family Unification Program (FUP), and special housing types such as Single Room Occupancies (SROs) and homeownership vouchers. SAFMRs do not apply to manufactured home space rental.

The Basic Range [24 CFR 982.503(c) and Notice PIH 2024-34] The PHAmay establish a payment standard within the "basic range" established by HUD between 90 and 110 percent of the published FMR for each unit size without HUD approval or prior notification to HUD. For each payment standard area, the PHAmust establish a payment standard amount for each unit size which may be based on the same percentage of the published FMR (for example, all units at 100 percent of FMR), or the PHAmay set different payment standards for different unit sizes (for example, 1-bedrooms at 90 percent and 2-bedrooms at 100 percent of the FMR). Designated Payment Standard Areas [24 CFR 982.503(a)(3) and Notice PIH 2024-34] The PHA may establish designated payment standard areas within each FMR area where the PHAestablishes different payment standards, provided each area is no smaller than a census tract block group. If the PHAdesignates payment standard areas, then it must include the criteria used to determine the designated areas and the payment standard amounts for those areas in the administrative plan.

Exception Payment Standards [24 CFR 982.503(d), Notice PIH 2018-01, Notice PIH 2024-34, and FR Notice 9/27/21] There are several options available to increase payment standards above the basic range. These are known as exception payment standards, which are payment standards that exceed 110 percent of the published FMR. The following are types of exception payment standards:

• Payment standards based on SAFMRs in ZIP codes where the SAFMR is higher than the

applicable metropolitan or non-metropolitan county FMR

• Payment standards greater than 110 percent up to 120 percent of the applicable FMR
• Payment standards over 120 percent of the applicable FMR
• Payment standards up to 120 percent of the FMR for Veterans Affairs Supportive Housing

(HUD-VASH)

• Payment standards necessary as a reasonable accommodation

Payment Standards based on SAFMRs in ZIP codes where the SAFMR is Higher than the FMR: Upon notification to HUD, a PHA that is not located in a SAFMR area or that has not opted to voluntarily adopt SAFMRs may establish an exception payment standard for a ZIP code area that exceeds the basic range for the metropolitan area or county FMR of up to and including 110 percent of the SAFMR for that ZIP code area. If an exception area crosses one or more FMR boundaries, then the maximum exception payment standard amount that a PHA may adopt for the area without HUD approval is 110 percent of the ZIP code area with the lowest SAFMR amount. A PHA that adopts an exception payment standard pursuant to this authority must apply it to the entire ZIP code area.

Payment Standards Greater than 110 Percent Up to 120 Percent: Upon notification to HUD, a PHA may establish exception payment standards between 110 percent and 120 percent of the applicable FMR if the PHA meets one of the following criteria:

• Success rate: Fewer than 75 percent of families to which the PHA has issued tenant-based

vouchers during the most recent 12-month period for which there is success rate data available have become participants on the program; or

• Rent burden: More than 40 percent of families with tenant-based assistance pay more than 30

percent of their adjusted income as their family share. The PHA may revert back to the basic range at any time without notification to HUD. PHAs may combine exception payment standards based on the SAFMR and exception payment standards greater than 110 and up to 120 percent. Other Exception Payment Standards: PHAs may request HUD approval to establish exception payment standards up to 120 percent of the FMR when the above criteria do not apply or in order to establish exception payment standards that exceed 120 percent of the FMR. Requests may be made for an entire FMR area or a designated part of the FMR area. Exception Payment Standards for VASH: In addition, HUD allows PHAs to establish a HUD- Veterans Affairs Supportive Housing (HUD-VASH) exception payment standard. PHAs may go up to but no higher than 120 percent of the FMR or SAFMR specifically for VASH families. PHAs who want to establish a VASH exception payment standard over 120 percent must still request a waiver from HUD (See Section 19-III.E.). Once exception payment standards are adopted, the PHA may use the exception payment standard for all units, or for only units of a particular size. The exception payment standard may be established for a designated part of the FMR area (called an "exception area") or for the entire FMR area. Exception areas are typically county, city, town, ZIP code, or census tract areas. However, so long as the exception area is no smaller than census tract block group, the PHA may determine the area for the exception area.

consider increasing the payment standard. In evaluating rent burdens, the Authority will not include families renting a larger unit than their family unit size. Quality of Units Selected: The Authority may review the quality of units selected by participant families when making the determination of the percent of income families are paying for housing, to ensure that payment standard increases are only made when needed to reach the mid-range of the market. Changes in Rent to Owner: The Authority may review a sample of the units to determine how often owners are increasing or decreasing rents and the average percent of increases and decreases by bedroom size. Unit Availability: The Authority may review the availability of units for each unit size, particularly in areas with low concentrations of poor and minority families. Lease-up Time and Success Rate: The Authority may consider the percentage of families that are unable to locate suitable housing before the voucher expires and whether families are leaving the jurisdiction to find affordable housing. Effective dates of changes to payment standard amounts will be determined at the time of update. The PHAwill always ensure the payment standards will be within the basic range. The PHAwill post its payment standards schedule on the PHA's website and include a copy in the voucher briefing materials.

16-II.C. UTILITY ALLOWANCES [24 CFR 982.517]

A PHA-established utility allowance schedule is used in determining family share and PHA subsidy. The PHA must maintain a utility allowance schedule for (1) all tenant-paid utilities, (2) the cost of tenant-supplied refrigerators and ranges, and (3) other tenant-paid housing services such as trash collection. The PHAmust maintain an area-wide utility allowance schedule. The utility allowance schedule must be determined based on the typical cost of utilities and services paid by energy-conservative households that occupy housing of similar size and type in the same locality. In developing the schedule, the PHA must use normal patterns of consumption for the community as a whole, and current utility rates. The utility allowance must include the utilities and services that are necessary in the locality to provide housing that complies with housing quality standards. Costs for telephone, cable/satellite television, and internet services are not included in the utility allowance schedule. In the utility allowance schedule, the PHA must classify utilities and other housing services according to the following general categories: space heating; air conditioning; cooking; water heating; water; sewer; trash collection; other electric; cost of tenant-supplied refrigerator; cost of tenant-supplied range; applicable surcharges; and other specified housing services. The cost of each utility and housing service must be stated separately by unit size and type. Chapter 18 of the HCV Guidebook provides detailed guidance to the PHA about establishing utility allowance schedules. The PHAmust state its policy for utility allowance payments in the administrative plan and apply it consistently to all households. The PHAmust provide a copy of the utility allowance schedule to HUD.

Energy Efficient Utility Allowance [24 CFR 982.517(b)(2)(ii)] In addition to the area-wide utility allowance standard, the PHAmay maintain an area-wide, energy efficient utility allowance schedule to be used for units that are in a building that meets Leadership in Energy and Environmental Design (LEED) or Energy Star standards.

Part Iii: Informal Reviews And Hearings

16-III.A. OVERVIEW

Both applicants and participants have the right to disagree with, and appeal, certain decisions of the PHA that may adversely affect them. PHA decisions that may be appealed by applicants and participants are discussed in this section. The process for applicant appeals of PHA decisions is called the "informal review." For participants (or applicants denied admission because of citizenship issues), the appeal process is called an "informal hearing." PHAs are required to include informal review procedures for applicants and informal hearing procedures for participants in their administrative plans [24 CFR 982.54(d)(12) and (13)].

16-III.B. INFORMAL REVIEWS

Informal reviews are provided for program applicants. An applicant is someone who has applied for admission to the program, but is not yet a participant in the program. Informal reviews are intended to provide a "minimum hearing requirement" [24 CFR 982.554] and need not be as elaborate as the informal hearing requirements [Federal Register 60, no. 127 (3 July 1995): 34690]. Decisions Subject to Informal Review [24 CFR 982.554(a) and (c)] The PHA must give an applicant the opportunity for an informal review of a decision denying assistance [24 CFR 982.554(a)]. Denial of assistance may include any or all of the following [24 CFR 982.552(a)(2)]:

• Denying listing on the PHA waiting list
• Denying or withdrawing a voucher
• Refusing to enter into a HAP contract or approve a lease
• Refusing to process or provide assistance under portability procedures

Informal reviews are not required for the following reasons [24 CFR 982.554(c)]:

• Discretionary administrative determinations by the PHA
• General policy issues or class grievances
• A determination of the family unit size under the PHA subsidy standards
• A PHA determination not to approve an extension of a voucher term
• A PHA determination not to grant approval of the tenancy
• A PHA determination that the unit is not in compliance with the housing quality standards
• A PHA determination that the unit does not meet space standards

denying or withdrawing a voucher; refusing to enter into a HAP contract or approve a lease; refusing to process or provide assistance under portability procedures. Notice to the Applicant [24 CFR 982.554(a)] The PHA must give an applicant prompt notice of a decision denying assistance. The notice must contain a brief statement of the reasons for the PHA decision, and must also state that the applicant may request an informal review of the decision. The notice must describe how to obtain the informal review. Scheduling an Informal Review

Remote Informal Reviews [Notice PIH 2020-32] There is no requirement that informal reviews be conducted in-person and, as such, HUD allows PHAs to conduct all or a portion of their informal review remotely either over the phone, via video conferencing, or through other virtual platforms. If the PHA chooses to conduct remote informal reviews, applicants may still request an in-person informal review, as applicable.

Conducting Remote Informal Reviews The PHA must ensure that the lack of technology or inability to use technology for remote informal reviews does not pose a disadvantage to families that may not be apparent to the PHA. The PHA should determine through a survey or other means if these barriers exist prior to conducting the remote informal review and, if the family does not have the proper technology to fully participate, either postpone the informal review or provide an alternative means of access. As with in-person informal reviews, the PHA must provide all materials presented, whether paper or electronic, to the family prior to the remote informal review. The family must also be provided with an accessible means by which to transmit their own evidence. The PHA must ensure that the applicant has the right to hear and be heard. All PHA policies and processes for remote informal reviews must be conducted in accordance with due process requirements and be in compliance with HUD regulations at 24 CFR 982.554 and guidance specified in Notice PIH 2020-32.

Informal Review Decision [24 CFR 982.554(b)] The PHA must notify the applicant of the PHA's final decision, including a brief statement of the reasons for the final decision.

16-III.C. INFORMAL HEARINGS FOR PARTICIPANTS [24 CFR 982.555]

PHAs must offer an informal hearing for certain PHA determinations relating to the individual circumstances of a participant family. A participant is defined as a family that has been admitted to the PHA's HCV program and is currently assisted in the program. The purpose of the informal hearing is to consider whether the PHA's decisions related to the family's circumstances are in accordance with the law, HUD regulations and PHA policies. The PHA is not permitted to terminate a family's assistance until the time allowed for the family to request an informal hearing has elapsed, and any requested hearing has been completed.

• Refusing to enter into a HAP contract or approve a lease
• Terminating housing assistance payments under an outstanding HAP contract
• Refusing to process or provide assistance under portability procedures

Decisions Subject to Informal Hearing Circumstances for which the PHA must give a participant family an opportunity for an informal hearing are as follows:

• A determination of the family's annual or adjusted income, and the use of such income to

compute the housing assistance payment

• A determination of the appropriate utility allowance (if any) for tenant-paid utilities from the

PHA utility allowance schedule

• A determination of the family unit size under the PHA's subsidy standards
• A determination to terminate assistance for a participant family because of the family's

actions or failure to act

• A determination to terminate assistance because the participant has been absent from the

assisted unit for longer than the maximum period permitted under PHA policy and HUD rules

Circumstances for which an informal hearing is not required are as follows:

• Discretionary administrative determinations by the PHA
• General policy issues or class grievances
• Establishment of the PHA schedule of utility allowances for families in the program
• A PHA determination not to approve an extension of a voucher term
• A PHA determination not to approve a unit or tenancy
• A PHA determination that the unit is not in accordance with space standards because of

family size

• A determination by the PHA to exercise or not to exercise any right or remedy against an

owner under a HAP contract

Remote Informal Hearings [Notice PIH 2020-32] There is no requirement that informal hearings be conducted in-person, and as such, HUD allows PHAs to conduct all or a portion of their informal hearings remotely either over the phone, via video conferencing, or through other virtual platforms. If the PHA chooses to conduct remote informal hearings, applicants may still request an in-person informal hearing, as applicable.

Conducting Informal Hearings Remotely The PHA must ensure that the lack of technology or inability to use technology for remote informal hearings does not pose a disadvantage to families that may not be apparent to the PHA. The PHA should determine through a survey or other means if these barriers exist prior to conducting the remote informal hearing and, if the family does not have the proper technology to fully participate, either postpone the informal hearing or provide an alternative means of access. As with in-person informal hearings, the PHA must provide all materials presented, whether paper or electronic, to the family prior to the remote informal hearing. The family must also be provided with an accessible means by which to transmit their own evidence. The PHA's essential responsibility is to ensure informal hearings meet the requirements of due process and comply with HUD regulations. Therefore, all PHA policies and processes for remote informal hearings will be conducted in accordance with due process requirements, and will be in compliance with HUD regulations at 24 CFR 982.555 and the guidance for conducting remote hearings specified in Notice PIH 2020-32.

Informal Hearing Procedures Notice to the Family [24 CFR 982.555(c)] When the PHA makes a decision that is subject to informal hearing procedures, the PHA must inform the family of its right to an informal hearing at the same time that it informs the family of the decision. For decisions related to the family's annual or adjusted income, the determination of the appropriate utility allowance, and the determination of the family unit size, the PHA must notify the family that they may ask for an explanation of the basis of the determination, and that if they do not agree with the decision, they may request an informal hearing on the decision. For decisions related to the termination of the family's assistance, or the denial of a family's request for an exception to the PHA's subsidy standards, the notice must contain a brief statement of the reasons for the decision, a statement that if the family does not agree with the decision, the family may request an informal hearing on the decision, and a statement of the deadline for the family to request an informal hearing.

The Authority must schedule and send written notice of the informal hearing to the family within ten (10) business days of the family's request. If the Authority hearing will be conducted remotely, at the time the notice is sent to the family, the family will be notified: Regarding the processes involved in a remote informal hearing; That the Authority will provide technical assistance prior to and during the informal hearing, if needed; and That if the family or any individual witness has any technological, resource, or accessibility barriers, the family may inform the Authority and the Authority will assist the family in either resolving the issue or allow the family to participate in an in-person hearing, as appropriate. The family may request to reschedule a hearing for good cause, or if it is needed as a reasonable accommodation for a person with disabilities. Good cause is defined as an unavoidable conflict which seriously affects the health, safety or welfare of the family. Requests to reschedule a hearing must be made in writing prior to the hearing date. At its discretion, the Authority may request documentation of the "good cause" prior to rescheduling the hearing. If the family does not appear within 15 minutes of the scheduled time, and was unable to reschedule the hearing in advance due to the nature of the conflict, the family must contact the Authority within 24 hours of the scheduled hearing date, excluding weekends and holidays. The Authority will reschedule the hearing only if the family can show good cause for the failure to appear, or if it is needed as a reasonable accommodation for a person with disabilities. If the family cannot show good cause for the failure to appear, or a rescheduling is not needed as a reasonable accommodation, the Authority's decision will stand. Pre-Hearing Right to Discovery [24 CFR 982.555(e)] Participants and the PHA are permitted pre-hearing discovery rights. The family must be given the opportunity to examine before the hearing any PHA documents that are directly relevant to the hearing. The family must be allowed to copy any such documents at their own expense. If the PHA does not make the document available for examination on request of the family, the PHA may not rely on the document at the hearing. For the purpose of informal hearings, documents include records and regulations.

remote informal hearing. The original hearing packet will be in the possession of the Authority representative and retained by the Authority. Documents will be shared electronically whenever possible. The PHA hearing procedures may provide that the PHA must be given the opportunity to examine at the PHA offices before the hearing any family documents that are directly relevant to the hearing. The PHA must be allowed to copy any such document at the PHA's expense. If the family does not make the document available for examination on request of the PHA, the family may not rely on the document at the hearing.

for conduct. Any person demonstrating disruptive, abusive or otherwise inappropriate behavior will be excused from the hearing at the discretion of the hearing officer. Evidence [24 CFR 982.555(e)(5)] The PHA and the family must be given the opportunity to present evidence and question any witnesses. In general, all evidence is admissible at an informal hearing. Evidence may be considered without regard to admissibility under the rules of evidence applicable to judicial proceedings.

Hearing Officer's Decision [24 CFR 982.555(e)(6)] The person who conducts the hearing must issue a written decision, stating briefly the reasons for the decision. Factual determinations relating to the individual circumstances of the family must be based on a preponderance of evidence presented at the hearing.

may not be determined by the number of witnesses, but by the greater weight of all evidence. Conclusions: The hearing officer will render a conclusion derived from the facts that were found to be true by a preponderance of the evidence. The conclusion will result in a determination of whether these facts uphold the Authority's decision. Order: The hearing report will include a statement of whether the Authority's decision is upheld or overturned. If it is overturned, the hearing officer will instruct the Authority to change the decision in accordance with the hearing officer's determination. In the case of termination of assistance, the hearing officer will instruct the Authority to restore the participant's program status. Issuance of Decision [24 CFR 982.555(e)(6)] A copy of the hearing order must be furnished promptly to the family.

16-III.D. HEARING AND APPEAL PROVISIONS FOR NONCITIZENS [24 CFR 5.514]

Denial or termination of assistance based on immigration status is subject to special hearing and notice rules. Applicants who are denied assistance due to immigration status are entitled to an informal hearing, not an informal review. Assistance to a family may not be delayed, denied, or terminated on the basis of immigration status at any time prior to a decision under the United States Citizenship and Immigration

Services (USCIS) appeal process. Assistance to a family may not be terminated or denied while the PHA hearing is pending, but assistance to an applicant may be delayed pending the completion of the informal hearing. A decision against a family member, issued in accordance with the USCIS appeal process or the PHA informal hearing process, does not preclude the family from exercising the right, that may otherwise be available, to seek redress directly through judicial procedures. Notice of Denial or Termination of Assistance [24 CFR 5.514(d)] The notice of denial or termination of assistance for noncitizens must advise the family:

• That financial assistance will be denied or terminated and provide a brief explanation of the

reasons for the proposed denial or termination of assistance.

• The family may be eligible for proration of assistance.
• In the case of a participant, the criteria and procedures for obtaining relief under the

provisions for preservation of families [24 CFR 5.514 and 5.518].

• That the family has a right to request an appeal to the USCIS of the results of secondary

verification of immigration status and to submit additional documentation or explanation in support of the appeal.

• That the family has a right to request an informal hearing with the PHA either upon

completion of the USCIS appeal or in lieu of the USCIS appeal.

• For applicants, assistance may not be delayed until the conclusion of the USCIS appeal

process, but assistance may be delayed during the period of the informal hearing process. USCIS Appeal Process [24 CFR 5.514(e)] When the PHA receives notification that the USCIS secondary verification failed to confirm eligible immigration status, the PHA must notify the family of the results of the USCIS verification. The family will have 30 days from the date of the notification to request an appeal of the USCIS results. The request for appeal must be made by the family in writing directly to the USCIS. The family must provide the PHA with a copy of the written request for appeal and the proof of mailing.

The USCIS will notify the family, with a copy to the PHA, of its decision. When the USCIS notifies the PHA of the decision, the PHA must notify the family of its right to request an informal hearing.

Recording of the Hearing The family is entitled to have the hearing recorded by audiotape. The PHA may, but is not required to provide a transcript of the hearing.

• The application for assistance
• The form completed by the family for income reexamination
• Photocopies of any original documents, including original USCIS documents
• The signed verification consent form
• The USCIS verification results
• The request for a USCIS appeal
• The final USCIS determination
• The request for an informal hearing
• The final informal hearing decision

Part Iv: Owner Or Family Debts To The Pha

16-IV.A. OVERVIEW

PHAs are required to include in the administrative plan, policies concerning repayment by a family of amounts owed to the PHA [24 CFR 982.54]. If the family breaches an agreement with the PHA to pay amounts owed to a PHA, or amounts paid to an owner by a PHA, the PHA, at its discretion, may offer a family the opportunity to enter an agreement to pay amounts owed to a PHA or amounts paid to an owner by a PHA. The PHA may prescribe the terms of the agreement [24 CFR 982.552(c)(1)(vii)]. This part describes the PHA's policies for recovery of monies owed to the PHA by families or owners.

• Requests for lump sum payments;
• Civil suits;
• Payment agreements;
• Abatements;
• Reductions in HAP to owner;
• Collection agencies;
• Credit bureaus;
• Income tax set-off programs;
• Referral to Inspector General's Office
• Referral to the District Attorney

The Authority may enter into repayment agreements in accordance with the policies contained in this part as a means to recover overpayments.

16-IV.B. REPAYMENT POLICY

Owner Debts to the PHA

If the owner refuses to repay the debt, does not enter into a repayment agreement, or breaches a repayment agreement, the Authority will ban the owner from future participation in the program and pursue other modes of collection. When an owner refuses to repay monies owed to the Authority, the Authority will utilize other available collection alternatives including, but not limited to, the following: Collection agencies Credit Bureaus Small claims court Civil lawsuit State income tax set-off program Referral to Inspector General's Office Referral to the District Attorney Family Debts to the PHA Families are required to reimburse the PHA if they were charged less rent than required because the family either underreported or failed to report income. PHAs are required to determine retroactive rent amounts as far back as the PHA has documentation of family unreported income [Notice PIH 2018-18].

Credit Bureaus Small claims court Civil lawsuit State income tax set-off program Referral to Inspector General's Office Referral to the District Attorney

Repayment Agreement [24 CFR 792.103] The term repayment agreement refers to a formal written document signed by a tenant or owner and provided to the PHA in which a tenant or owner acknowledges a debt in a specific amount and agrees to repay the amount due at specific time periods. General Repayment Agreement Guidelines for Families Down Payment Requirement

The amount owed by the family to the Authority The reason for the debt, including whether the debt was the result of family action/inaction or circumstances beyond the family's control The family's current and potential income and expenses The family's current family share, as calculated under 24 CFR 982.515 The family's history of meeting its financial responsibilities

Execution of the Agreement All repayment agreements must be in writing, dated, and signed by both the family and the PHA [Notice PIH 2018-18].

• Require the family to pay the balance in full;
• Pursue civil collection of the balance due

The Authority will consider a breach of the agreement will terminate assistance in accordance with the policies in Chapter 12. No Offer of Repayment Agreement

• A reference to the items in the family briefing packet that state the family's obligation to

provide true and complete information at every reexamination and the grounds on which the PHA may terminate assistance because of a family's action or failure to act

• A statement clarifying that each month the family not only must pay to the PHA the monthly

payment amount specified in the agreement but must also pay to the owner the family's monthly share of the rent to owner

• A statement that the terms of the repayment agreement may be renegotiated if the family's

income decreases or increases

• A statement that late or missed payments constitute default of the repayment agreement and

may result in termination of assistance

Part V: Section 8 Management Assessment Program (Semap)

16-V.A. OVERVIEW

The Section 8 Management Assessment Program (SEMAP) is a tool that allows HUD to measure PHA performance in key areas to ensure program integrity and accountability. SEMAP scores translate into a rating for each PHA as high performing, standard, or troubled. Scores on individual SEMAP indicators, as well as overall SEMAP ratings, can affect the PHA in several ways.

• High-performing PHAs can be given a competitive advantage under notices of funding

availability [24 CFR 985.103].

• PHAs with deficiencies on one or more indicators are required to correct the deficiencies and

report to HUD [24 CFR 985.106].

• PHAs with an overall rating of "troubled" are subject to additional HUD oversight, including

on-site reviews by HUD staff, a requirement to develop a corrective action plan, and monitoring to ensure the successful implementation of the corrective action plan. In addition, PHAs that are designated "troubled" may not use any part of the administrative fee reserve for other housing purposes [24 CFR 985.107].

• HUD may determine that a PHA's failure to correct identified SEMAP deficiencies or to

prepare and implement a corrective action plan required by HUD constitutes a default under the ACC [24 CFR 985.109].

16-V.B. SEMAP CERTIFICATION [24 CFR 985.101]

PHAs must submit the HUD-required SEMAP certification form within 60 calendar days after the end of its fiscal year. The certification must be approved by PHA board resolution and signed by the PHA executive director. If the PHA is a unit of local government or a state, a resolution approving the certification is not required, and the certification must be executed by the Section 8 program director. PHAs with less than 250 voucher units are only required to be assessed every other PHA fiscal year. HUD will assess such PHAs annually if the PHA elects to have its performance assessed on an annual basis; or is designated as "troubled" [24 CFR 985.105]. Failure of a PHA to submit its SEMAP certification within the required time frame will result in an overall performance rating of "troubled." A PHA's SEMAP certification is subject to HUD verification by an on-site confirmatory review at any time. For small PHAs, HUD may conduct a remote confirmatory review. Upon receipt of the PHA's SEMAP certification, HUD will rate the PHA's performance under each SEMAP indicator in accordance with program requirements. HUD Verification Method Several of the SEMAP indicators are scored based on a review of a quality control sample selected for this purpose. The PHA or the Independent Auditor must select an unbiased sample that provides an adequate representation of the types of information to be assessed, in accordance with SEMAP requirements [24 CFR 985.2].

If the HUD verification method for the indicator relies on data in the Form-50058 module (formerly known as MTCS) in the PIH Information Center (PIC), and HUD determines that those data are insufficient to verify the PHA's certification on the indicator due to the PHA's failure to adequately report family data, HUD will assign a zero rating for the indicator [24 CFR 985.3].

16-V.C. SEMAP INDICATORS [24 CFR 985.3 and Form HUD-52648]

The table below lists each of the SEMAP indicators, contains a description of each indicator, and explains the basis for points awarded under each indicator. A PHA that expends less than $300,000 in Federal awards and whose Section 8 programs are not audited by an independent auditor, is not be rated under SEMAP indicators 1-7.

SEMAP Indicators Indicator 1: Selection from the waiting list Maximum Score: 15

• This indicator shows whether the PHA has written policies in its administrative plan for

selecting applicants from the waiting list and whether the PHA follows these policies when selecting applicants from the waiting list.

• Points are based on the percent of families that are selected from the waiting list in

accordance with the PHA's written policies, according to the PHA's quality control samples. Indicator 2: Rent reasonableness Maximum Score: 20

• This indicator shows whether the PHA has and implements a reasonable written method

to determine and document for each unit leased that the rent to owner is reasonable based on current rents for comparable unassisted units at the required times.

• Points are based on the percent of units for which the PHA follows its written method to

determine reasonable rent and has documented its determination that the rent to owner is reasonable, according to the PHA's quality control sample. Indicator 3: Determination of adjusted income Maximum Score: 20

• This indicator measures whether the PHA verifies and correctly determines adjusted

income for each assisted family, and where applicable, uses the appropriate utility allowances for the unit leased in determining the gross rent.

• Points are based on the percent of files that are calculated and verified correctly,

according to the PHA's quality control sample. Indicator 4: Utility allowance schedule Maximum Score: 5

• This indicator shows whether the PHA maintains an up-to-date utility allowance

schedule.

• Points are based on whether the PHA has reviewed the utility allowance schedule and

adjusted it when required, according to the PHA's certification.

Indicator 5: HQS quality control inspections Maximum Score: 5

• This indicator shows whether a PHA supervisor reinspects a sample of units under

contract during the PHA fiscal year, which meets the minimum sample size requirements for quality control of HQS inspections.

• Points are based on whether the required quality control reinspections were completed,

according to the PHA's certification.

Indicator 6: HQS enforcement Maximum Score: 10

• This indicator shows whether, following each inspection of a unit under contract where

the unit fails to meet housing quality standards, any cited life-threatening deficiencies are corrected within 24 hours from the inspection and all other deficiencies are corrected within no more than 30 calendar days from the inspection or any PHA-approved extension.

• Points are based on whether the PHA corrects all deficiencies in accordance with

required time frames, according to the PHA's certification.

Indicator 7: Expanding housing opportunities Maximum Points: 5

• Only applies to PHAs with jurisdiction in metropolitan FMR areas.
• This indicator shows whether the PHA has adopted and implemented a written policy to

encourage participation by owners of units located outside areas of poverty or minority concentration; informs voucher holders of the full range of areas where they may lease units both inside and outside the PHA's jurisdiction; and supplies a list of landlords or other parties who are willing to lease units or help families find units, including units outside areas of poverty or minority concentration.

• Points are based on whether the PHA has adopted and implemented written policies in

accordance with SEMAP requirements, according to the PHA's certification.

Indicator 8: FMR limit and payment standards Maximum Points: 5 points

• This indicator shows whether the PHA has adopted a payment standard schedule that

establishes payment standard amounts by unit size for each FMR area in the PHA's jurisdiction, that are within the basic range of 90 to 110 percent of the published FMR.

• Points are based on whether the PHA has appropriately adopted a payment standard

schedule(s), according to the PHA's certification.

Indicator 9: Annual reexaminations Maximum Points: 10

• This indicator shows whether the PHA completes a reexamination for each participating

family at least every 12 months.

• Points are based on the percent of reexaminations that are less than two months overdue,

according to data from PIC.

Indicator 10: Correct tenant rent calculations Maximum Points: 5

• This indicator shows whether the PHA correctly calculates the family's share of the rent

to owner.

• Points are based on the percent of correct calculations of family share of the rent,

according to data from PIC. Indicator 11: Pre-contract inspections Maximum Points: 5

• This indicator shows whether newly leased units pass inspection on or before the

effective date of the assisted lease and HAP contract.

• Points are based on the percent of newly leased units that passed inspection on or before

the effective date of the lease and HAP contract, according to data from PIC. Indicator 12: Annual inspections Maximum Points: 10

• This indicator shows whether the PHA inspects each unit under contract at least

annually.

• Points are based on the percent of annual inspections of units under contract that are

more than 2 months overdue, according to data from PIC. Indicator 13: Lease-up Maximum Points: 20 points

• This indicator shows whether the PHA enters HAP contracts for at least 98 percent of the

number of the PHA's baseline voucher units in the ACC for the calendar year ending on or before the PHA's fiscal year, or whether the PHA has expended at least 98 percent of its allocated budget authority for the same calendar year. The PHA can receive 15 points if 95 to 97 percent of vouchers are leased or budget authority is utilized.

• Points are based on utilization of vouchers and HAP expenditures as reported in the

voucher management system (VMS) for the most recently completed calendar year. Indicator 14: Family self-sufficiency (FSS) enrollment and escrow account balances Maximum Points: 10

• Only applies to PHAs with mandatory FSS programs.
• This indicator shows whether the PHA has enrolled families in the FSS program as

required, and measures the percent of current FSS participants that have had increases in earned income which resulted in escrow account balances.

• Points are based on the percent of mandatory FSS slots that are filled and the percent of

families with escrow account balances, according to data from PIC.

Success Rate of Voucher Holders Maximum Points: 5

• Only applies to PHAs that have received approval to establish success rate payment

standard amounts, and isn't effective until the second full PHA fiscal year following the date of HUD approval of success rate payment standard amounts.

• This indicator shows whether voucher holders were successful in leasing units with

voucher assistance.

• Points are based on the percent of families that were issued vouchers, and that became

participants in the voucher program. Deconcentration Bonus Indicator Maximum Points: 5

• Submission of data for this indicator is mandatory for a PHA using one or more payment

standard amount(s) that exceed(s) 100 percent of the published FMR set at the 50th percentile rent, starting with the second full PHA fiscal year following initial use of payment standard amounts based on the FMRs set at the 50th percentile.

• Additional points are available to PHAs that have jurisdiction in metropolitan FMR areas

and that choose to submit the required data.

• Points are based on whether the data that is submitted meets the requirements for bonus

points.

Part Vi: Record Keeping

16-VI.A. OVERVIEW

The PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. All such records must be made available to HUD or the Comptroller General of the United States upon request. In addition, the PHA must ensure that all applicant and participant files are maintained in a way that protects an individual's privacy rights.

16-VI.B. RECORD RETENTION [24 CFR 982.158; 24 CFR 908.101]

During the term of each assisted lease, and for at least three years thereafter, the PHA must keep:

• A copy of the executed lease;
• The HAP contract; and
• The application from the family.

In addition, the PHA must keep the following records for at least three years:

• Records that provide income, racial, ethnic, gender, and disability status data on program

applicants and participants;

• An application from each ineligible family and notice that the applicant is not eligible;
• HUD-required reports;
• Unit inspection reports;
• Lead-based paint records as required by 24 CFR 35, Subpart B.
• Accounts and other records supporting PHA budget and financial statements for the program;
• Records to document the basis for PHA determination that rent to owner is a reasonable rent

(initially and during the term of a HAP contract); and

• Other records specified by HUD.

The PHA must keep the last three years of the Form HUD-50058 and supporting documentation during the term of each assisted lease, and for a period of at least three years from the end of participation (EOP) date [24 CFR 908.101]. The PHA must maintain Enterprise Income Verification (EIV) system Income Reports in the tenant file for the duration of the tenancy but for a period not to exceed three years from the EOP date [Notice PIH 2018-18].

Notice PIH 2014-20 requires PHAs to keep records of all complaints, investigations, notices, and corrective actions related to violations of the Fair Housing Act or the equal access final rule.

16-VI.C. RECORDS MANAGEMENT

PHAs must maintain applicant and participant files and information in accordance with the regulatory requirements described below.

Upfront Income Verification (UIV) Records PHAs that access UIV data through HUD's Enterprise Income Verification (EIV) system are required to adopt and follow specific security procedures to ensure that all EIV data is protected in accordance with federal laws, regardless of the media on which the data is recorded (e.g. electronic, paper). These requirements are contained in the HUD-issued document, Enterprise Income Verification (EIV) System, Security Procedures for Upfront Income Verification data.

PART VII: REPORTING AND RECORD KEEPING FOR CHILDREN WITH

ELEVATED BLOOD LEAD LEVEL

16-VII.A. OVERVIEW

The PHA has certain responsibilities relative to children with elevated blood lead levels that are receiving HCV assistance. The notification, verification, and hazard reduction requirements are discussed in Chapter 8. This part deals with the reporting requirements, and data collection and record keeping responsibilities that the PHA is subject to.

16-VII.B. REPORTING REQUIREMENT [24 CFR 35.1225(e); Notice PIH 2017-13]

The owner must report the name and address of a child identified as having an elevated blood lead level to the public health department within five business days of being so notified by any other medical health care professional. The owner must also notify the HUD field office and the HUD Office of Lead Hazard Control and Healthy Homes (OLHCHH) of the child's address within five business days. The PHA may collaborate with the owner on the notification process, such as by agreeing with the owner to provide the required notifications on the owner's behalf.

16-VII.C. DATA COLLECTION AND RECORD KEEPING [24 CFR 35.1225(f)]

At least quarterly, the PHA must attempt to obtain from the public health department(s) with a similar area of jurisdiction, the names and/or addresses of children less than 6 years old with an elevated blood lead level. If the PHA obtains names and addresses of elevated blood lead level children from the public health department(s), the PHA must match this information with the names and addresses of families receiving HCV assistance, unless the public health department performs such a procedure. If a match occurs, the PHA must carry out the notification, verification, and hazard reduction requirements discussed in Chapter 8, and the reporting requirement discussed above. At least quarterly, the PHA must also report an updated list of the addresses of units receiving assistance under the HCV program to the same public health department(s), unless the public health department(s) states that it does not wish to receive such a report.

Part Viii: Determination Of Insufficient Funding

16-VIII.A. OVERVIEW

The HCV regulations allow PHAs to deny families permission to move and to terminate Housing Assistance Payments (HAP) contracts if funding under the consolidated ACC is insufficient to support continued assistance [24 CFR 982.354(e)(1) and 982.454]. If a PHA denies a family a portability move based on insufficient funding, the PHA is required to notify the local HUD office within 10 business days [24 CFR 982.354]. Insufficient funding may also impact the PHA's ability to issue vouchers to families on the waiting list. This part discusses the methodology the PHA will use to determine whether or not the PHA has sufficient funding to issue vouchers, approve moves, and to continue subsidizing all families currently under a HAP contract. The PHA must identify in the administrative plan, in the event of insufficient funding, considering any cost saving measures taken by the PHA, a description of the factors the PHA will consider when determining which HAP contracts to terminate first. See Chapter 12 for a description of these factors.

16-VIII.B. METHODOLOGY

PART IX: VIOLENCE AGAINST WOMEN ACT (VAWA): NOTIFICATION,

DOCUMENTATION, CONFIDENTIALITY

16-IX.A. OVERVIEW

The Violence Against Women Act (VAWA) provides special protections for victims of domestic violence, dating violence, sexual assault, stalking, and human trafficking who are applying for or receiving assistance under the housing choice voucher (HCV) program. If your state or local laws provide greater protection for such victims, those laws apply in conjunction with VAWA.

• Although the VAWA 2022 statute does not specifically include human trafficking in the list

of victims protected under VAWA, in 2022 HUD began including human trafficking as part of the list of victims protected under VAWA (as seen in Notices PIH 2022-06, PIH 2022-22, and PIH 2022-24). In the absence of a final rule implementing VAWA 2022 and to mirror HUD's recent usage, this policy includes human trafficking in addition to domestic violence, dating violence, sexual assault, and stalking anywhere such a list appears. In addition to definitions of key terms used in VAWA, this part contains general VAWA requirements and PHA policies in three areas: notification, documentation, and confidentiality. Specific VAWA requirements and PHA policies are located primarily in the following sections: 3-I.C, "Family Breakup and Remaining Member of Tenant Family"; 3-III.H, "Prohibition against Denial of Assistance to Victims of Domestic Violence, Dating Violence, Sexual Assault, Stalking and Human Trafficking"; 10-I.A, "Allowable Moves"; 10-I.B, "Restrictions on Moves"; 12-II.E, "Terminations Related to Domestic Violence, Dating Violence, Sexual Assault, Stalking, or Human Trafficking"; and 12-II.F, "Termination Notice."

16-IX.B. DEFINITIONS [24 CFR 5.2003, 42 USC 13925]

As used in VAWA:

• The term affiliated individual means, with respect to a person:

- A spouse, parent, brother or sister, or child of that individual, or an individual to whom that individual stands in the position or place of a parent; or - Any other individual, tenant, or lawful occupant living in the household of the victim of domestic violence, dating violence, sexual assault, or stalking.

• The term bifurcate means, with respect to a public housing or Section 8 lease, to divide a

lease as a matter of law such that certain tenants can be evicted or removed while the remaining family members' lease and occupancy rights are allowed to remain intact.

• The term dating violence means violence committed by a person who is or has been in a

social relationship of a romantic or intimate nature with the victim; and where the existence of such a relationship shall be determined based on a consideration of the following factors: - The length of the relationship - The type of relationship - The frequency of interaction between the persons involved in the relationship

• The term domestic violence includes felony or misdemeanor crimes committed by a current

or former spouse or intimate partner of the victim under the family or domestic violence laws of the jurisdiction receiving grant funding, and in the case of victim services, includes the user or attempted use of physical abuse or sexual abuse, or a pattern of any other coercive behavior committed, enabled, or solicited to gain or maintain power and control over a victim, including verbal, psychological, economic, or technological abuse that may or may not constitute criminal behavior, by a person who is: - The current or former spouse or intimate partner of the victim, or person similarly situated to a spouse or intimate partner of the victim - A person who is cohabitating or has cohabitated with the victim as a spouse or intimate partner - A person with whom the victim shares a child in common - A person who commits acts against an youth or adult victim who is protected from those acts under the domestic or family violence laws of the jurisdiction

• The term economic abuse means behavior that is coercive, deceptive, or unreasonably

controls or restrains a person's ability to acquire, use, or maintain economic resources to which they are entitled, including using coercion, fraud, and manipulation to: - Restrict a person's access to money, assets, credit, or financial information - Unfairly use a person's personal economic resources, including money, assets, and credit, for one's own advantage - Exert undue influence over a person's financial and economic behavior or decisions, including forcing default on joint or other financial obligations, exploiting powers of attorney, guardianship, or conservatorship, or to whom one has a fiduciary duty

• The term sexual assault means:

- Any nonconsensual sexual act proscribed by federal, tribal, or state law, including when the victim lacks the capacity to consent

• The term stalking means:

- To engage in a course of conduct directed at a specific person that would cause a reasonable person to fear for their safety or the safety of others, or suffer substantial emotional distress.

• The term technological abuse means an act or pattern of behavior that occurs within

domestic violence, dating violence, sexual assault, or stalking and is intended to harm, threaten, intimidate, control, stalk, harass, impersonate, exploit, extort, or monitor another person, except as otherwise permitted by law, that occurs using any form of technology, including but not limited to: - Internet enabled devices - Online spaces and platforms - Computers - Mobile devices - Cameras and imaging programs - Apps - Location tracking devices - Communication technologies - Any other emergency technologies

16-IX.C. NOTIFICATION [24 CFR 5.2005(a)]

Notification to Public The PHA adopts the following policy to help ensure that all actual and potential beneficiaries of its HCV program are aware of their rights under VAWA.

Notification to Program Applicants and Participants [24 CFR 5.2005(a)(1)] PHAs are required to inform program applicants and participants of their rights under VAWA, including their right to confidentiality and the limits thereof, when they are denied assistance, when they are admitted to the program, and when they are notified of an eviction or termination of housing benefits.

Notification to Owners and Managers While PHAs are no longer required by regulation to notify owners and managers participating in the HCV program of their rights and obligations under VAWA, the PHA may still choose to inform them.

16-IX.D. DOCUMENTATION [24 CFR 5.2007]

A PHA presented with a claim for initial or continued assistance based on status as a victim of domestic violence, dating violence, sexual assault, stalking, human trafficking, or criminal activity related to any of these forms of abuse may—but is not required to—request that the individual making the claim document the abuse. Any request for documentation must be in writing, and the individual must be allowed at least 14 business days after receipt of the request to submit the documentation. The PHA may extend this time period at its discretion. [24 CFR 5.2007(a)] The individual may satisfy the PHA's request by providing any one of the following three forms of documentation [24 CFR 5.2007(b)]: (1) A completed and signed HUD-approved certification form (HUD-5382, Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking), which must include the name of the perpetrator only if the name of the perpetrator is safe to provide and is known to the victim. The form may be filled out and submitted on behalf of the victim. (2) A federal, state, tribal, territorial, or local police report or court record, or an administrative record (3) Documentation signed by a person who has assisted the victim in addressing domestic violence, dating violence, sexual assault, stalking, human trafficking, or the effects of such abuse. This person may be an employee, agent, or volunteer of a victim service provider; an attorney; a mental health professional; or a medical professional. The person signing the documentation must attest under penalty of perjury to the person's belief that the incidents in question are bona fide incidents of abuse. The victim must also sign the documentation. The PHA may not require third-party documentation (forms 2 and 3) in addition to certification (form 1), except as specified below under "Conflicting Documentation," nor may it require certification in addition to third-party documentation [FR Notice 11/16/16].

documentation must be submitted, and will state the consequences for failure to submit the documentation or request an extension in writing by the deadline. The Authority may, in its discretion, extend the deadline for 10 business days. In determining whether to extend the deadline, the Authority will consider factors that may contribute to the victim's inability to provide documentation in a timely manner, including cognitive limitations, disabilities, limited English proficiency, absence from the unit, administrative delays, the danger of further violence, and the victim's need to address health or safety issues. Any extension granted by the Authority will be in writing. Once the victim provides documentation, the Authority will acknowledge receipt of the documentation within fifteen (15) business days.

Conflicting Documentation [24 CFR 5.2007(e)] In cases where the PHA receives conflicting certification documents from two or more members of a household, each claiming to be a victim and naming one or more of the other petitioning household members as the perpetrator, the PHA may determine which is the true victim by requiring each to provide acceptable third-party documentation, as described above (forms 2 and 3). The PHA may also request third-party documentation when submitted documentation contains information that conflicts with existing information already available to the PHA. Individuals have 30 calendar days to return third-party verification to the PHA. If the PHA does not receive third-party documentation, and the PHA will deny or terminate assistance as a result, the PHA must hold separate hearings for the tenants [Notice PIH 2017-08]. The PHA must honor any court orders issued to protect the victim or to address the distribution of property.

16-IX.E. CONFIDENTIALITY [24 CFR 5.2007(b)(4)]

All information provided to the PHA regarding domestic violence, dating violence, sexual assault, stalking, or human trafficking, including the fact that an individual is a victim, must be retained in confidence. This means that the PHA (1) may not enter the information into any shared database, (2) may not allow employees or others to access the information unless they are explicitly authorized to do so and have a need to know the information for purposes of their work, and (3) may not provide the information to any other entity or individual, except to the extent that the disclosure is (a) requested or consented to by the individual in writing, (b) required for use in an eviction proceeding, or (c) otherwise required by applicable law.

EXHIBIT 16-1: SAMPLE NOTICE OF OCCUPANCY RIGHTS UNDER THE VIOLENCE AGAINST WOMEN ACT, FORM HUD-5380

[Insert Name of Housing Provider] Notice of Occupancy Rights under the Violence Against Women Act1

To all Tenants and Applicants The Violence Against Women Act (VAWA) provides protections for victims of domestic violence, dating violence, sexual assault, or stalking. VAWA protections are not only available to women, but are available equally to all individuals regardless of sex, gender identity, or sexual orientation.2 The U.S. Department of Housing and Urban Development (HUD) is the federal agency that oversees that the housing choice voucher program is in compliance with VAWA. This notice explains your rights under VAWA. A HUD-approved certification form is attached to this notice. You can fill out this form to show that you are or have been a victim of domestic violence, dating violence, sexual assault, or stalking, and that you wish to use your rights under VAWA."

Protections for Applicants If you otherwise qualify for assistance under the housing choice voucher program, you cannot be denied admission or denied assistance because you are or have been a victim of domestic violence, dating violence, sexual assault, or stalking.

Protections for Tenants If you are receiving assistance under the housing choice voucher program, you may not be denied assistance, terminated from participation, or be evicted from your rental housing because you are or have been a victim of domestic violence, dating violence, sexual assault, or stalking. Also, if you or an affiliated individual of yours is or has been the victim of domestic violence, dating violence, sexual assault, or stalking by a member of your household or any guest, you may not be denied rental assistance or occupancy rights under the housing choice voucher program solely on the basis of criminal activity directly relating to that domestic violence, dating violence, sexual assault, or stalking. Affiliated individual means your spouse, parent, brother, sister, or child, or a person to whom you stand in the place of a parent or guardian (for example, the affiliated individual is in your care, custody, or control); or any individual, tenant, or lawful occupant living in your household.

1 Despite the name of this law, VAWA protection is available regardless of sex, gender identity, or sexual orientation. 2 Housing providers cannot discriminate on the basis of any protected characteristic, including race, color, national origin, religion, sex, familial status, disability, or age. HUD-assisted and HUD-insured housing must be made available to all otherwise eligible individuals regardless of actual or perceived sexual orientation, gender identity, or marital status.

Removing the Abuser or Perpetrator from the Household The PHA may divide (bifurcate) your lease in order to evict the individual or terminate the assistance of the individual who has engaged in criminal activity (the abuser or perpetrator) directly relating to domestic violence, dating violence, sexual assault, or stalking. If the PHA chooses to remove the abuser or perpetrator, the PHA may not take away the rights of eligible tenants to the unit or otherwise punish the remaining tenants. If the evicted abuser or perpetrator was the sole tenant to have established eligibility for assistance under the program, the PHA must allow the tenant who is or has been a victim and other household members to remain in the unit for a period of time, in order to establish eligibility under the program or under another HUD housing program covered by VAWA, or, find alternative housing. In removing the abuser or perpetrator from the household, the PHA must follow federal, state, and local eviction procedures. In order to divide a lease, the PHA may, but is not required to, ask you for documentation or certification of the incidences of domestic violence, dating violence, sexual assault, or stalking.

Moving to Another Unit Upon your request, the PHA may permit you to move to another unit, subject to the availability of other units, and still keep your assistance. In order to approve a request, the PHA may ask you to provide documentation that you are requesting to move because of an incidence of domestic violence, dating violence, sexual assault, or stalking. If the request is a request for emergency transfer, the housing provider may ask you to submit a written request or fill out a form where you certify that you meet the criteria for an emergency transfer under VAWA. The criteria are: 1. You are a victim of domestic violence, dating violence, sexual assault, or stalking. If your housing provider does not already have documentation that you are a victim of domestic violence, dating violence, sexual assault, or stalking, your housing provider may ask you for such documentation, as described in the documentation section below. 2. You expressly request the emergency transfer. Your housing provider may choose to require that you submit a form, or may accept another written or oral request. 3. You reasonably believe you are threatened with imminent harm from further violence if you remain in your current unit. This means you have a reason to fear that if you do not receive a transfer you would suffer violence in the very near future. OR You are a victim of sexual assault and the assault occurred on the premises during the 90-calendar-day period before you request a transfer. If you are a victim of sexual assault, then in addition to qualifying for an emergency transfer because you reasonably believe you are threatened with imminent harm from further violence if you remain in your unit, you may qualify for an emergency transfer if the sexual assault occurred on the premises of the property from which you are seeking your transfer, and that assault happened within the 90-calendar- day period before you expressly request the transfer.

The PHA will keep confidential requests for emergency transfers by victims of domestic violence, dating violence, sexual assault, or stalking, and the location of any move by such victims and their families. The PHA's emergency transfer plan provides further information on emergency transfers, and the PHA must make a copy of its emergency transfer plan available to you if you ask to see it.

Documenting You Are or Have Been a Victim of Domestic Violence, Dating Violence, Sexual Assault or Stalking The PHA can, but is not required to, ask you to provide documentation to "certify" that you are or have been a victim of domestic violence, dating violence, sexual assault, or stalking. Such request from the PHA must be in writing, and the PHA must give you at least 14 business days (Saturdays, Sundays, and federal holidays do not count) from the day you receive the request to provide the documentation. The PHA may, but does not have to, extend the deadline for the submission of documentation upon your request. You can provide one of the following to the PHA as documentation. It is your choice which of the following to submit if the PHA asks you to provide documentation that you are or have been a victim of domestic violence, dating violence, sexual assault, or stalking.

•  A complete HUD-approved certification form given to you by the PHA with this notice,

that documents an incident of domestic violence, dating violence, sexual assault, or stalking. The form will ask for your name, the date, time, and location of the incident of domestic violence, dating violence, sexual assault, or stalking, and a description of the incident. The certification form provides for including the name of the abuser or perpetrator if the name of the abuser or perpetrator is known and is safe to provide.

•  A record of a Federal, State, tribal, territorial, or local law enforcement agency, court, or

administrative agency that documents the incident of domestic violence, dating violence, sexual assault, or stalking. Examples of such records include police reports, protective orders, and restraining orders, among others.

• A statement, which you must sign, along with the signature of an employee, agent, or

vounteer of a victim service provider, an attorney, a medical professional or a mental helth professional (collectively, "professional") from whom you sought assistance in addressing domestic violence, dating violence, sexual assault, or stalking, or the effects of abuse, and with the professional selected by you attesting under penalty of perjury that they believe that the incident or incidents of domestic violence, dating violence, sexual assault, or stalking are grounds for protection.

•  Any other statement or evidence that the PHA has agreed to accept.

If you fail or refuse to provide one of these documents within the 14 business days, the PHA does not have to provide you with the protections contained in this notice. If the PHA receives conflicting evidence that an incident of domestic violence, dating violence, sexual assault, or stalking has been committed (such as certification forms from two or more members of a household each claiming to be a victim and naming one or more of the other petitioning household members as the abuser or perpetrator), the PHA has the right to request that you provide third-party documentation within thirty 30 calendar days in order to resolve the conflict. If you fail or refuse to provide third-party documentation where there is conflicting evidence, the PHA does not have to provide you with the protections contained in this notice.

Confidentiality The PHA must keep confidential any information you provide related to the exercise of your rights under VAWA, including the fact that you are exercising your rights under VAWA. The PHA must not allow any individual administering assistance or other services on behalf of the PHA (for example, employees and contractors) to have access to confidential information unless for reasons that specifically call for these individuals to have access to this information under applicable Federal, State, or local law. The PHA must not enter your information into any shared database or disclose your information to any other entity or individual. The PHA, however, may disclose the information provided if:

•  You give written permission to the PHA to release the information on a time limited

basis.

•  The PHA needs to use the information in an eviction or termination proceeding, such as

to evict your abuser or perpetrator or terminate your abuser or perpetrator from assistance under this program.

•  A law requires the PHA or your landlord to release the information.

VAWA does not limit the PHA's duty to honor court orders about access to or control of the property. This includes orders issued to protect a victim and orders dividing property among household members in cases where a family breaks up.

Reasons a Tenant Eligible for Occupancy Rights under VAWA May Be Evicted or Assistance May Be Terminated You can be evicted and your assistance can be terminated for serious or repeated lease violations that are not related to domestic violence, dating violence, sexual assault, or stalking committed against you. However, the PHA cannot hold tenants who have been victims of domestic violence, dating violence, sexual assault, or stalking to a more demanding set of rules than it applies to tenants who have not been victims of domestic violence, dating violence, sexual assault, or stalking. The protections described in this notice might not apply, and you could be evicted and your assistance terminated, if the PHA can demonstrate that not evicting you or terminating your assistance would present a real physical danger that: 1. Would occur within an immediate time frame, and 2. Could result in death or serious bodily harm to other tenants or those who work on the property. If the PHA can demonstrate the above, the PHA should only terminate your assistance or evict you if there are no other actions that could be taken to reduce or eliminate the threat.

Other Laws VAWA does not replace any federal, state, or local law that provides greater protection for victims of domestic violence, dating violence, sexual assault, or stalking. You may be entitled to additional housing protections for victims of domestic violence, dating violence, sexual assault, or stalking under other Federal laws, as well as under State and local laws.

Non-Compliance with The Requirements of This Notice You may report a covered housing provider's violations of these rights and seek additional assistance, if needed, by contacting or filing a complaint with [insert contact information for any intermediary, if applicable] or [insert HUD field office].

For Additional Information You may view a copy of HUD's final VAWA rule at: https://www.gpo.gov/fdsys/pkg/FR-2016- 11-16/pdf/2016-25888.pdf. Additionally, the PHA must make a copy of HUD's VAWA regulations available to you if you ask to see them. For questions regarding VAWA, please contact [insert name of program or rental assistance contact information able to answer questions on VAWA]. For help regarding an abusive relationship, you may call the National Domestic Violence Hotline at 1-800-799-7233 or, for persons with hearing impairments, 1-800-787-3224 (TTY). You may also contact [Insert contact information for relevant local organizations]. For tenants who are or have been victims of stalking seeking help may visit the National Center for Victims of Crime's Stalking Resource Center at https://www.victimsofcrime.org/our- programs/stalking-resource-center. For help regarding sexual assault, you may contact [Insert contact information for relevant organizations] Victims of stalking seeking help may contact [Insert contact information for relevant organizations].

Attachment: Certification Form HUD-5382 [form approved for this program to be included]

EXHIBIT 16-2: CERTIFICATION OF DOMESTIC VIOLENCE, DATING VIOLENCE, SEXUAL ASSAULT, OR STALKING AND ALTERNATE DOCUMENTATION, FORM HUD-5382 CERTIFICATION OF U.S. Department of Housing OMB Approval No. 2577-0286 DOMESTIC VIOLENCE, and Urban Development Exp. 06/30/2017 DATING VIOLENCE, SEXUAL ASSAULT, OR STALKING, AND ALTERNATE DOCUMENTATION Purpose of Form: The Violence Against Women Act ("VAWA") protects applicants, tenants, and program participants in certain HUD programs from being evicted, denied housing assistance, or terminated from housing assistance based on acts of domestic violence, dating violence, sexual assault, or stalking against them. Despite the name of this law, VAWA protection is available to victims of domestic violence, dating violence, sexual assault, and stalking, regardless of sex, gender identity, or sexual orientation. Use of This Optional Form: If you are seeking VAWA protections from your housing provider, your housing provider may give you a written request that asks you to submit documentation about the incident or incidents of domestic violence, dating violence, sexual assault, or stalking. In response to this request, you or someone on your behalf may complete this optional form and submit it to your housing provider, or you may submit one of the following types of third-party documentation: (1) A document signed by you and an employee, agent, or volunteer of a victim service provider, an attorney, or medical professional, or a mental health professional (collectively, "professional") from whom you have sought assistance relating to domestic violence, dating violence, sexual assault, or stalking, or the effects of abuse. The document must specify, under penalty of perjury, that the professional believes the incident or incidents of domestic violence, dating violence, sexual assault, or stalking occurred and meet the definition of "domestic violence," "dating violence," "sexual assault," or "stalking" in HUD's regulations at 24 CFR 5.2003. (2) A record of a Federal, State, tribal, territorial or local law enforcement agency, court, or administrative agency; or (3) At the discretion of the housing provider, a statement or other evidence provided by the applicant or tenant. Submission of Documentation: The time period to submit documentation is 14 business days from the date that you receive a written request from your housing provider asking that you provide documentation of the occurrence of domestic violence, dating violence, sexual assault, or stalking. Your housing provider may, but is not required to, extend the time period to submit the documentation, if you request an extension of the time period. If the requested information is not received within 14 business days of when you received the request for the documentation, or any extension of the date provided by your housing provider, your housing provider does not need to grant you any of the VAWA protections. Distribution or issuance of this form does not serve as a written request for certification. Confidentiality: All information provided to your housing provider concerning the incident(s) of domestic violence, dating violence, sexual assault, or stalking shall be kept confidential and such details shall not be entered into any shared database. Employees of your housing provider are not to have access to these details unless to grant or deny VAWA protections to you, and such employees may not disclose this information to any other entity or individual, except to the extent that disclosure is: (i) consented to by you in writing in a time-limited release; (ii) required for use in an eviction proceeding or hearing regarding termination of assistance; or (iii) otherwise required by applicable law.

TO BE COMPLETED BY OR ON BEHALF OF THE VICTIM OF DOMESTIC VIOLENCE, DATING VIOLENCE, SEXUAL ASSAULT, OR STALKING 1. Date the written request is received by victim: _________________________________________

2. Name of victim: ___________________________________________________________________

3. Your name (if different from victim's):________________________________________________

4. Name(s) of other family member(s) listed on the lease:___________________________________

___________________________________________________________________________________

5. Residence of victim: ________________________________________________________________

6. Name of the accused perpetrator (if known and can be safely disclosed):____________________

__________________________________________________________________________________

7. Relationship of the accused perpetrator to the victim:___________________________________

8. Date(s) and times(s) of incident(s) (if known):___________________________________________

_________________________________________________________________

10. Location of incident(s):_____________________________________________________________

In your own words, briefly describe the incident(s): ______________________________________________________________________________________

______________________________________________________________________________________ ______________________________________________________________________________________

This is to certify that the information provided on this form is true and correct to the best of my knowledge and recollection, and that the individual named above in Item 2 is or has been a victim of domestic violence, dating violence, sexual assault, or stalking. I acknowledge that submission of false information could jeopardize program eligibility and could be the basis for denial of admission, termination of assistance, or eviction.

Signature __________________________________Signed on (Date) ___________________________ Public Reporting Burden: The public reporting burden for this collection of information is estimated to average 1 hour per response. This includes the time for collecting, reviewing, and reporting the data. The information provided is to be used by the housing provider to request certification that the applicant or tenant is a victim of domestic violence, dating violence, sexual assault, or stalking. The information is subject to the confidentiality requirements of VAWA. This agency may not collect this information, and you are not required to complete this form, unless it displays a currently valid Office of Management and Budget control number.

EXHIBIT 16-3: EMERGENCY TRANSFER PLAN FOR VICTIMS OF DOMESTIC VIOLENCE, DATING VIOLENCE, SEXUAL ASSAULT, OR STALKING (HCV VERSION) Attachment: Certification form HUD-5382

[Insert name of covered housing provider]

Emergency Transfer Plan for Victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking Housing Choice Voucher Program

Emergency Transfers The PHA is concerned about the safety of its tenants, and such concern extends to tenants who are victims of domestic violence, dating violence, sexual assault, or stalking. In accordance with the Violence Against Women Act (VAWA),3 the PHA allows tenants who are victims of domestic violence, dating violence, sexual assault, or stalking to request an emergency transfer from the tenant's current unit to another unit. The ability to request a transfer is available regardless of sex, gender identity, or sexual orientation.4 The ability of the PHA to honor such request for tenants currently receiving assistance, however, may depend upon a preliminary determination that the tenant is or has been a victim of domestic violence, dating violence, sexual assault, or stalking, and on whether the PHA has another dwelling unit that is available and is safe to offer the tenant for temporary or more permanent occupancy. This plan identifies tenants who are eligible for an emergency transfer, the documentation needed to request an emergency transfer, confidentiality protections, how an emergency transfer may occur, and guidance to tenants on safety and security. This plan is based on a model emergency transfer plan published by the U.S. Department of Housing and Urban Development (HUD), the federal agency that oversees that the public housing and housing choice voucher (HCV) programs are in compliance with VAWA.

A tenant who is a victim of domestic violence, dating violence, sexual assault, or stalking, as provided in HUD's regulations at 24 CFR part 5, subpart L, is eligible for an emergency transfer if the tenant reasonably believes that there is a threat of imminent harm from further violence if the tenant remains within the same unit. If the tenant is a victim of sexual assault, the tenant may also be eligible to transfer if the sexual assault occurred on the premises within the 90-calendar- day period preceding a request for an emergency transfer.

3 Despite the name of this law, VAWA protection is available to all victims of domestic violence, dating violence, sexual assault, and stalking, regardless of sex, gender identity, or sexual orientation. 4 Housing providers cannot discriminate on the basis of any protected characteristic, including race, color, national origin, religion, sex, familial status, disability, or age. HUD-assisted and HUD-insured housing must be made available to all otherwise eligible individuals regardless of actual or perceived sexual orientation, gender identity, or marital status.

A tenant requesting an emergency transfer must expressly request the transfer in accordance with the procedures described in this plan. Tenants who are not in good standing may still request an emergency transfer if they meet the eligibility requirements in this section.

Emergency Transfer Request Documentation To request an emergency transfer, the tenant shall notify the PHA's management office and submit a written request for a transfer to any PHA office. The PHA will provide reasonable accommodations to this policy for individuals with disabilities. The tenant's written request for an emergency transfer should include either: 1. A statement expressing that the tenant reasonably believes that there is a threat of imminent harm from further violence if the tenant were to remain in the same dwelling unit assisted under the PHA's program; OR 2. A statement that the tenant was a sexual assault victim and that the sexual assault occurred on the premises during the 90-calendar-day period preceding the tenant's request for an emergency transfer.

Confidentiality The PHA will keep confidential any information that the tenant submits in requesting an emergency transfer, and information about the emergency transfer, unless the tenant gives the PHA written permission to release the information on a time-limited basis, or disclosure of the information is required by law or required for use in an eviction proceeding or hearing regarding termination of assistance from the covered program. This includes keeping confidential the new location of the dwelling unit of the tenant, if one is provided, from the person or persons that committed an act of domestic violence, dating violence, sexual assault, or stalking against the tenant. See the Notice of Occupancy Rights under the Violence against Women Act for All Tenants for more information about the PHA's responsibility to maintain the confidentiality of information related to incidents of domestic violence, dating violence, sexual assault, or stalking.

Emergency Transfer Timing and Availability The PHA cannot guarantee that a transfer request will be approved or how long it will take to process a transfer request. The PHA will, however, act as quickly as possible to move a tenant who is a victim of domestic violence, dating violence, sexual assault, or stalking to another unit, subject to availability and safety of a unit. If a tenant reasonably believes a proposed transfer would not be safe, the tenant may request a transfer to a different unit. If a unit is available, the transferred tenant must agree to abide by the terms and conditions that govern occupancy in the unit to which the tenant has been transferred. The PHA may be unable to transfer a tenant to a particular unit if the tenant has not or cannot establish eligibility for that unit. If the PHA has no safe and available units for which a tenant who needs an emergency transfer is eligible, the PHA will assist the tenant in identifying other housing providers who may have safe and available units to which the tenant could move. At the tenant's request, the PHA will also assist tenants in contacting the local organizations offering assistance to victims of domestic violence, dating violence, sexual assault, or stalking that are attached to this plan.

Emergency Transfers: Housing Choice Voucher (HCV) Program Tenant-based assistance: If you are a participant in the tenant-based HCV program and request an emergency transfer as described in this plan, the PHA will assist you to move to a safe unit quickly using your existing voucher assistance. The PHA will make exceptions to program regulations restricting moves as required. At your request, the PHA will refer you to organizations that may be able to further assist you. Project-based assistance: If you are assisted under the project-based voucher (PBV) program, you may request an emergency transfer under the following programs for which you are not required to apply:

• Tenant-based voucher, if available
• Project-based assistance in the same project (if a vacant unit is available and you

determine that the vacant unit is safe)

• Project-based assistance in another development owned by the PHA

Emergency transfers under VAWA will take priority over waiting list admissions for these types of assistance. You may also request an emergency transfer under the following programs for which you are required to apply:

• Public housing program
• PBV assistance in another development not owned by the PHA
• [Insert other programs the PHA provides, such as LIHTC or HOME]

Emergency transfers will not take priority over waiting list admissions for these programs. At your request, the PHA will refer you to organizations that may be able to further assist you.

Safety and Security of Tenants Pending processing of the transfer and the actual transfer, if it is approved and occurs, the tenant is urged to take all reasonable precautions to be safe. Tenants who are or have been victims of domestic violence are encouraged to contact the National Domestic Violence Hotline at 1-800-799-7233, or a local domestic violence shelter, for assistance in creating a safety plan. For persons with hearing impairments, that hotline can be accessed by calling 1-800-787-3224 (TTY). Tenants who have been victims of sexual assault may call the Rape, Abuse, and Incest National Network's National Sexual Assault Hotline at 1-800-656-HOPE, or visit the online hotline at: https://ohl.rainn.org/online/. Tenants who are or have been victims of stalking seeking help may visit the National Center for Victims of Crime's Stalking Resource Center at: https://www.victimsofcrime.org/our- programs/stalking-resource-center. Attachment: Local organizations offering assistance to victims of domestic violence, dating violence, sexual assault, or stalking.

EXHIBIT 16-4: EMERGENCY TRANSFER REQUEST FOR CERTAIN VICTIMS OF DOMESTIC VIOLENCE, DATING VIOLENCE, SEXUAL ASSAULT, OR STALKING, FORM HUD-5383 EMERGENCY TRANSFER U.S. Department of Housing OMB Approval No. 2577-0286 REQUEST FOR CERTAIN and Urban Development Exp. 06/30/2017 VICTIMS OF DOMESTIC VIOLENCE, DATING VIOLENCE, SEXUAL ASSAULT, OR STALKING Purpose of Form: If you are a victim of domestic violence, dating violence, sexual assault, or stalking, and you are seeking an emergency transfer, you may use this form to request an emergency transfer and certify that you meet the requirements of eligibility for an emergency transfer under the Violence Against Women Act (VAWA). Although the statutory name references women, VAWA rights and protections apply to all victims of domestic violence, dating violence, sexual assault or stalking. Using this form does not necessarily mean that you will receive an emergency transfer. See your housing provider's emergency transfer plan for more information about the availability of emergency transfers. The requirements you must meet are: (1) You are a victim of domestic violence, dating violence, sexual assault, or stalking. If your housing provider does not already have documentation that you are a victim of domestic violence, dating violence, sexual assault, or stalking, your housing provider may ask you for such documentation. In response, you may submit Form HUD-5382, or any one of the other types of documentation listed on that Form. (2) You expressly request the emergency transfer. Submission of this form confirms that you have expressly requested a transfer. Your housing provider may choose to require that you submit this form, or may accept another written or oral request. Please see your housing provider's emergency transfer plan for more details. (3) You reasonably believe you are threatened with imminent harm from further violence if you remain in your current unit. This means you have a reason to fear that if you do not receive a transfer you would suffer violence in the very near future. OR You are a victim of sexual assault and the assault occurred on the premises during the 90-calendar-day period before you request a transfer. If you are a victim of sexual assault, then in addition to qualifying for an emergency transfer because you reasonably believe you are threatened with imminent harm from further violence if you remain in your unit, you may qualify for an emergency transfer if the sexual assault occurred on the premises of the property from which you are seeking your transfer, and that assault happened within the 90-calendar-day period before you submit this form or otherwise expressly request the transfer. Submission of Documentation: If you have third-party documentation that demonstrates why you are eligible for an emergency transfer, you should submit that documentation to your housing provider if it is safe for you to do so. Examples of third party documentation include, but are not limited to: a letter or other documentation from a victim service provider, social worker, legal assistance provider, pastoral counselor, mental health provider, or other professional from whom you have sought assistance; a current restraining order; a recent court order or other court records; a law enforcement report or records; communication records from the perpetrator of the violence or family members or friends of the perpetrator of the violence, including emails, voicemails, text messages, and social media posts.

Confidentiality: All information provided to your housing provider concerning the incident(s) of domestic violence, dating violence, sexual assault, or stalking, and concerning your request for an emergency transfer shall be kept confidential. Such details shall not be entered into any shared database. Employees of your housing provider are not to have access to these details unless to grant or deny VAWA protections or an emergency transfer to you. Such employees may not disclose this information to any other entity or individual, except to the extent that disclosure is: (i) consented to by you in writing in a time-limited release; (ii) required for use in an eviction proceeding or hearing regarding termination of assistance; or (iii) otherwise required by applicable law. TO BE COMPLETED BY OR ON BEHALF OF THE PERSON REQUESTING A TRANSFER 1. Name of victim requesting an emergency transfer: ______________________________________

2. Your name (if different from victim's)_________________________________________________

3. Name(s) of other family member(s) listed on the lease:____________________________________

___________________________________________________________________________________

4. Name(s) of other family member(s) who would transfer with the victim:____________________

____________________________________________________________________________________

5. Address of location from which the victim seeks to transfer: _______________________________________

6. Address or phone number for contacting the victim:____________________________________

7. Name of the accused perpetrator (if known and can be safely disclosed):___________________

8. Relationship of the accused perpetrator to the victim:___________________________________

9. Date(s), Time(s) and location(s) of incident(s):___________________________________________

_____________________________________________________________________________________

10. Is the person requesting the transfer a victim of a sexual assault that occurred in the past 90 days on the premises of the property from which the victim is seeking a transfer? If yes, skip question 11. If no, fill out question 11. ______________

11. Describe why the victim believes they are threatened with imminent harm from further violence if they remain in their current unit. ___________________________________________________________________________________

_____________________________________________________________________________________

12. If voluntarily provided, list any third-party documentation you are providing along with this notice: ___________________________________________________________________

This is to certify that the information provided on this form is true and correct to the best of my knowledge, and that the individual named above in Item 1 meets the requirement laid out on this form for an emergency transfer. I acknowledge that submission of false information could jeopardize program eligibility and could be the basis for denial of admission, termination of assistance, or eviction.

Signature __________________________________Signed on (Date) ___________________________

EXHIBIT 16-5: MODEL OWNER NOTIFICATION OF RIGHTS AND OBLIGATIONS [Insert Name of Housing Provider] NOTIFICATION OF YOUR RIGHTS AND OBLIGATIONS UNDER THE VIOLENCE AGAINST WOMEN ACT (VAWA) VAWA provides protections for Section 8 Housing Choice Voucher (HCV) and PBV applicants, tenants, and participants from being denied assistance on the basis or as a direct result of being a victim of domestic violence, dating violence, sexual assault, stalking and human trafficking. Purpose Many of VAWA's protections to victims of domestic violence, dating violence, sexual assault stalking, and human trafficking involve action by the public housing agency (PHA), but some situations involve action by owners of assisted housing. The purpose of this notice (herein called "Notice") is to explain your rights and obligations under VAWA, as an owner of housing assisted through [insert name of housing provider] HCV program. Each component of this Notice also provides citations to HUD's applicable regulations. Denial of Tenancy Protections for applicants: Owners cannot deny tenancy based on the applicant having been or currently being a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking. However, the applicant must be otherwise eligible for tenancy. (See 24 Code of Federal Regulations (CFR) 982.452(b)(1).) Eviction Protections for HCV participants: Incidents or threats of domestic violence, dating violence, sexual assault, stalking, or human trafficking will not be considered a serious or repeated lease violation by the victim, or good cause to terminate the tenancy of the victim (see 24 CFR 5.2005(c)). Protection also applies to criminal activity related directly to domestic violence, dating violence, sexual assault, stalking, or human trafficking, conducted by a member of a tenant's household or any guest or other person under the tenant's control, if the tenant or an affiliated individual of the tenant is the victim or threatened victim of such domestic violence, dating violence, sexual assault, stalking, or human trafficking (24 CFR 5.2005(b)(2)). Limitations of VAWA protections: a. Nothing in VAWA limits the authority of an owner, when notified of a court order, to comply with a court order with respect to (24 CFR 5.2005(d)(1)): 1) The rights of access or control of property, including civil protection orders issued to protect a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking; or 2) The distribution or possession of property among members of a household in a case. b. Nothing in VAWA limits an owner from evicting a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking for a lease violation that is not premised on an act of domestic violence, dating violence, sexual assault, stalking, or human trafficking, as long as the owner does not subject the victim to more demanding standards than other tenants when deciding whether to evict. (See 24 CFR 5.2005(d)(2).)

c. Nothing in VAWA limits an owner from evicting a tenant (including the victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking) if the owner can demonstrate an actual and imminent threat to other tenants or those employed at or providing services to the HCV property would be present if the tenant or lawful occupant is not evicted. (See 24 CFR 5.2005(d)(3).) i. In this context, words, gestures, actions, or other indicators will be considered an "actual and imminent threat" if they meet the following standards: An actual and imminent threat consists of a physical danger that is real, would occur within an immediate time frame, and could result in death or serious bodily harm. In determining whether an individual would pose an actual and imminent threat, the factors to be considered include: the duration of the risk, the nature and severity of the potential harm, the likelihood that the potential harm will occur, and the length of time before the potential harm would occur. (See 24 CFR 5.2003.) ii. Any eviction due to "actual and imminent threat" should be utilized by an owner only when there are no other actions that could be taken to reduce or eliminate the threat, including, but not limited to, transferring the victim to a different unit, barring the perpetrator from the property, contacting law enforcement to increase police presence or develop other plans to keep the property safe, or seeking other legal remedies to prevent the perpetrator from acting on a threat. Restrictions predicated on public safety cannot be based on stereotypes, but must be tailored to particularized concerns about individual residents. (See 24 CFR 5.2005(d)(4).) Documentation of Domestic Violence, Dating Violence, Sexual Assault, Stalking, or Human Trafficking If an applicant or tenant requests VAWA protection based on status as a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking, the owner has the option to request that the victim document or provide written evidence to demonstrate that the violence occurred. However, nothing in HUD's regulation requires a covered housing provider to request this documentation. (See 24 CFR 5.2007(b)(3).) If the owner chooses to request this documentation, the owner must make such request in writing. The individual may satisfy this request by providing any one document type listed under 24 CFR 5.2007(b)(1): a. Form HUD-55383 (Self-Certification Form); or b. A document: 1) Signed by an employee, agent, or volunteer of a victim service provider, an attorney, or medical professional or a mental health professional (collectively, "professional") from whom the victim has sought assistance relating to domestic violence, dating violence, sexual assault, stalking, or human trafficking, or the effects of abuse: 2) Signed by the applicant or tenant; and 3) That specifies, under penalty of perjury, that the professional believes in the occurrence of the incident of domestic violence, dating violence, sexual assault, stalking, or human trafficking that is the ground for protection and remedies under 24 CFR part 5, subpart L, and that the incident meets the applicable definition of domestic violence, dating violence, sexual assault, stalking, or human trafficking under 24 CFR 5.2003; or c. A record of a Federal, State, tribal, territorial or local law enforcement agency, court, or administrative agency; or d. At the discretion of a covered housing provider, a statement or other evidence provided by the applicant or tenant.

The owner must accept any of the above items (a – c). The owner has discretion to accept a statement or other evidence (d). The owner is prohibited from requiring third-party documentation of the domestic violence, dating violence, sexual assault, stalking, or human trafficking, unless the submitted documentation contains conflicting information. If the owner makes a written request for documentation, the owner may require submission of that documentation within 14 business days after the date that the individual received the written request for documentation. (24 CFR 5.2007(a)(2)). The owner may extend this time period at its discretion. During the 14 business day period and any granted extensions of that time, no adverse actions, such as evictions or terminations, can be taken against the individual requesting VAWA protection. Once a victim provides documentation of domestic violence, dating violence, sexual assault, stalking, or human trafficking, the owner is encouraged to acknowledge receipt of the documentation in a timely manner. If the applicant or tenant fails to provide documentation that meets the criteria in 24 CFR 5.2007 within 14 business days after receiving the written request for that documentation or within the designated extension period, nothing in VAWA may be construed to limit the authority of the covered housing provider to: a. Deny admission by the applicant or tenant to the housing or program; b. Deny assistance under the covered housing program to the applicant or tenant; c. Terminate the participation of the tenant in the covered housing program; or d. Evict the tenant, or a lawful occupant that commits a violation of a lease. An individual's failure to timely provide documentation of domestic violence, dating violence, sexual assault, stalking, or human trafficking does not result in a waiver of the individual's right to challenge the denial of assistance or termination, nor does it preclude the individual's ability to raise an incident of domestic violence, dating violence, sexual assault, stalking, or human trafficking at eviction or termination proceedings. exercises or assists or encourages a person to exercise any rights or protections under VAWAs (See FR Notice 1/4/23.) Moves A victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking may move in violation of their lease if the move is required to protect their safety. If a move results in the termination of the Housing Assistance Payment Contract, the lease is automatically terminated.

Lease Bifurcation evict, remove, terminate occupancy rights, or terminate assistance to such member who engages in criminal activity directly relating to domestic violence, dating violence, sexual assault, stalking, or human trafficking against an affiliated individual or other individual. (See 24 CFR 5.2009(a).) If an owner chooses to bifurcate the lease, the owner must comply with the reasonable time to establish eligibility under the covered housing program or find alternative housing following lease bifurcation provision in 24 CFR 5.2009(b). VAWA protections, including bifurcation, do not apply to guests or unreported members of a household or anyone else residing in a household who is not a tenant. Eviction, removal, termination of occupancy rights, or termination of assistance must be effected in accordance with the procedures prescribed by federal, state, or local law for termination of leases. To avoid unnecessary delay in the bifurcation process, HUD recommends that owners seek court-ordered eviction of the perpetrator pursuant to applicable laws. This process results in the underlying lease becoming null and void once the owner regains possession of the unit. The owner would then execute a new lease with the victim. Evictions Due to "Actual and Imminent Threat" or Violations Not Premised on Abuse VAWA generally prohibits eviction on the basis or as a direct result of the fact that the applicant or tenant is or has been a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking, if the applicant or tenant otherwise qualifies for assistance, participation or occupancy. (See 24 CFR 5.2005.) However, VAWA does not prohibit an owner from evicting a tenant for any violation not premised on an act of domestic violence, dating violence, sexual assault, stalking, or human trafficking that is in question against the tenant or an affiliated individual of the tenant. Nor does VAWA prohibit an owner from evicting a tenant if the owner can demonstrate an actual and imminent threat to other tenants or those employed at or providing services to property of the owner would be present if that tenant or lawful occupant is not evicted or terminated from assistance. (See 5.2005(d)(2) and (3).) In order to demonstrate an actual and imminent threat to other tenants or employees at the property, the covered housing provider must have objective evidence of words, gestures, actions, or other indicators that meet the standards in the following definition: Actual and imminent threat refers to a physical danger that is real, would occur within an immediate time frame, and could result in death or serious bodily harm. In determining whether an individual would pose an actual and imminent threat, the factors to be considered include:

• The duration of the risk;
• The nature and severity of the potential harm;
• The likelihood that the potential harm will occur; and
• The length of time before the potential harm would occur.

(See 24 CFR 5.2003 and 5.2005(d)(2).)

Confidentiality Any information submitted to a covered housing provider under 24 CFR 5.2007, including the fact that an individual is a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking, must be maintained in strict confidence by the covered housing provider. (See 24 CFR 5.2007(c).) Employees of the owner (or those within their employ, e.g., contractors) must not have access to the information unless explicitly authorized by the owner for reasons that specifically call for these individuals to have access to this information under applicable federal, state, or local law (e.g., the information is needed by an employee to provide the VAWA protections to the victim). The owner must not enter this information into any shared database, or disclose this information to any other entity or individual, except to the extent that disclosure is: a. Requested or consented to in writing by the individual (victim) in a time-limited release; b. Required for use in an eviction proceeding or hearing regarding termination of assistance from the covered program; or c. Otherwise required by applicable law. When communicating with the victim, owners must take precautions to ensure compliance with these confidentiality requirements. Service Providers [insert name of housing provider] has extensive relationships with local service providers. [insert name of housing provider] staff are available to provide referrals to shelters, counselors, and advocates. These resources are also provided in [insert name of housing provider] Annual and 5-Year Plan, Administrative Plan, VAWA Notice of Occupancy Rights, and Emergency Transfer Plan. A list of local service providers is attached to this Notice. Definitions Actual and imminent threat refers to a physical danger that is real, would occur within an immediate time frame, and could result in death or serious bodily harm. In determining whether an individual would pose an actual and imminent threat, the factors to be considered include: the duration of the risk, the nature and severity of the potential harm, the likelihood that the potential harm will occur, and the length of time before the potential harm would occur. Affiliated individual, with respect to an individual, means: (1) A spouse, parent, brother, sister, or child of that individual, or a person to whom that individual stands in the place of a parent or guardian (for example, the affiliated individual is a person in the care, custody, or control of that individual); or (2) Any individual, tenant, or lawful occupant living in the household of that individual. Bifurcate means to divide a lease as a matter of law, subject to the permissibility of such process under the requirements of the applicable HUD-covered program and State or local law, such that certain tenants or lawful occupants can be evicted or removed and the remaining tenants or lawful occupants can continue to reside in the unit under the same lease requirements or as may be revised depending upon the eligibility for continued occupancy of the remaining tenants and lawful occupants.

Dating violence means violence committed by a person: (1) Who is or has been in a social relationship of a romantic or intimate nature with the victim; and (2) Where the existence of such a relationship shall be determined based on a consideration of the following factors: (i) The length of the relationship; (ii) The type of relationship; and (iii) The frequency of interaction between the persons involved in the relationship. Domestic violence includes felony or misdemeanor crimes of committed by a current or former spouse or intimate partner of the victim under the family or domestic violence laws of the jurisdiction receiving grant funding, and in the case of victim services, includes the user or attempted use of physical abuse or sexual abuse, or a pattern of any other coercive behavior committed, enabled, or solicited to gain or maintain power and control over a victim, including verbal, psychological, economic, or technological abuse that may or may not constitute criminal behavior, by a person who is:

• The current or former spouse or intimate partner of the victim, or person similarly situated to a

spouse or intimate partner of the victim

• A person who is cohabitating or has cohabitated with the victim as a spouse or intimate partner
• A person with whom the victim shares a child in common
• A person who commits acts against an youth or adult victim who is protected from those acts

under the domestic or family violence laws of the jurisdiction Sexual assault means any nonconsensual sexual act proscribed by Federal, tribal, or State law, including when the victim lacks capacity to consent. Stalking means engaging in a course of conduct directed at a specific person that would cause a reasonable person to: (1) Fear for the person's individual safety or the safety of others; or (2) Suffer substantial emotional distress. VAWA means the Violence Against Women Act of 1994, as amended (42 U.S.C. 13925 and 42 U.S.C. 14043e et seq.). Attached: Legal services and the domestic violence resources for the Metro area Form HUD-5382 Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking [insert name of housing provider] VAWA Notice of Occupancy Rights

PROJECT-BASED VOUCHERS

INTRODUCTION This chapter describes HUD regulations and PHA policies related to the project-based voucher (PBV) program in nine parts: Part I: General Requirements. This part describes general provisions of the PBV program including maximum budget authority requirements, the cap on the number of assisted units in each project, relocation requirements, and equal opportunity requirements. Part II: PBV Owner Proposals. This part includes policies related to the submission and selection of owner proposals for PBV assistance. It describes the factors the PHA will consider when selecting proposals, the type of housing that is eligible to receive PBV assistance, subsidy layering requirements, site selection standards, and environmental review requirements. Part III: Dwelling Units. This part describes requirements related to inspections, the type and frequency of inspections, and housing accessibility for persons with disabilities. Part IV: Rehabilitated and Newly Constructed Units. This part describes requirements and policies related to the development and completion of rehabilitated and newly constructed housing units that will be receiving PBV assistance. Part V: Housing Assistance Payments Contract. This part discusses HAP contract requirements and policies including the execution, term, and termination of the HAP contract. In addition, it describes how the HAP contract may be amended and identifies provisions that may be added to the HAP contract at the PHA's discretion. Part VI: Selection of PBV Program Participants. This part describes the requirements and policies governing how the PHA and the owner will select a family to receive PBV assistance. Part VII: Occupancy. This part discusses occupancy requirements related to the lease and describes under what conditions families are allowed or required to move. Part VIII: Determining Rent to Owner. This part describes how the initial rent to owner is determined, and how rent will be redetermined throughout the life of the HAP contract. Rent reasonableness requirements are also discussed. Part IX: Payments to Owner. This part describes the types of payments owners may receive under this program.

Part I: General Requirements

17-I.A. OVERVIEW [24 CFR 983.5]

The project-based voucher (PBV) program allows PHAs that already administer a tenant-based voucher program under an annual contribution contract (ACC) with HUD to take up to 20 percent of its authorized units (plus an additional 10 percent for units meeting certain criteria) and attach the funding to specific units rather than using it for tenant-based assistance [24 CFR 983.6]. Assistance may be tied to a multifamily building or a single-family building. PHAs may only operate a PBV program if doing so is consistent with the PHA's Annual Plan, and the goal of deconcentrating poverty and expanding housing and economic opportunities [42 U.S.C. 1437f(o)(13)]. A PHA has discretion whether to operate a PBV program. HUD approval is not required, except that the PHA must notify HUD of its intent to project-base its vouchers and when the PHA executes, amends, or extends a HAP contract. The PHA must also state in its administrative plan that it will engage in project-basing and must amend its administrative plan to include all PBV-related matters over which the PHA is exercising its discretion.

17-I.B. PBV DEFINITIONS [24 CFR 983.3]

The following terms apply to the PBV program and are used throughout this chapter: Excepted units are units in a project not counted toward the project cap because they exclusively serve or are made available to certain families in accordance with 24 CFR 983.54(c)(2). Excluded units are units in a project not counted toward the program cap or project cap because they meet certain criteria in accordance with 24 CFR 983.59. Existing housing is a project that meets the following criteria:

• All the proposed contract units in the project either fully comply or substantially comply with

HQS on the proposal or project selection date, as determined per 24 CFR 983.103(a). (The units must fully comply with HQS at the time required by 24 CFR 983.103(c). The units substantially comply with HQS if: - The units only require repairs to current components or replacement of equipment and/or materials by items of substantially the same kind to correct deficiencies; and - The PHA determines all deficiencies can reasonably be corrected within a 30-day period, taking into consideration the totality of the deficiencies in the project.

• The PHA determines the project is not reasonably expected to require substantial

improvement and the owner certifies it has no plans to undertake substantial improvement from the proposal submission date (for projects subject to competitive selection) or the

project selection date (for projects excepted from competitive selection) through the first two years of the HAP contract.

• The following units do not qualify as existing housing:

- Units for which rehabilitation or new construction began after proposal submission or the date of board resolution but prior to the effective date of an AHAP (if applicable); and - Units that were newly constructed or rehabilitated in violation of program requirements. An independent entity is either:

• The unit of general local government; however, if the PHA itself is the unit of general local

government or an agency of such government, then only the next level of general local government (or an agency of such government) or higher may serve as the independent entity; or

• A HUD-approved entity that is autonomous and recognized under state law as a separate

legal entity from the PHA. The entity must not be connected financially (except regarding compensation for services performed for PHA-owned units) or in any other manner that could result in the PHA improperly influencing the entity. An in-place family is a family residing in a proposed contract unit on the proposal or project selection date. Newly constructed housing is a project containing housing units that do not exist on the proposal or project selection date and are developed after the date of selection for use under the PBV program. A PHA-owned unit is a dwelling unit in a project that is:

• Owned by the PHA (including having a controlling interest in the entity that owns the

project);

• Owned by an entity wholly controlled by the PHA; or
• Owned by a limited liability company or limited partnership in which the PHA (or an entity

wholly controlled by the PHA) holds a controlling interest in the managing member or general partner. - A controlling interest is:

• Holding more than 50 percent of the stock of any corporation;
• Having the power to appoint more than 50 percent of the members of the board of

directors of a non-stock corporation (such as a nonprofit corporation);

• Where more than 50 percent of the members of the board of directors of any

corporation also serve as directors, officers, or employees of the PHA;

• Holding more than 50 percent of all managing member interests in an LLC;
• Holding more than 50 percent of all general partner interests in a partnership; or
• Equivalent levels of control in other ownership structures.

A project can be a single building, multiple contiguous buildings, or multiple buildings on contiguous parcels of land. "Contiguous" in this definition includes "adjacent to," as well as touching along a boundary or a point. A PHA may, in its administrative plan, establish the circumstances under which it will define a project as only one of the following: a single building, multiple contiguous buildings, or multiple buildings on contiguous parcels of land.

• Remodeling that alters the nature or type of housing units in a project;
• Reconstruction; or

A substantial improvement in the quality or kind of equipment and materials. The replacement of equipment and/or materials rendered unsatisfactory because of normal wear and tear by items of substantially the same kind does not constitute substantial improvement.

17-I.C. MAXIMUM NUMBER OF PBV UNITS (PERCENTAGE LIMITATION)

[24 CFR 983.6] Program Cap If a PHA decides to operate a PBV program, the PHA's PBV program is funded with a portion of appropriated funding (budget authority) available under the PHA's voucher Annual Contributions Contract (ACC). Except for certain units discussed below, a PHA may commit project-based assistance to no more than 20 percent of its authorized voucher units, as adjusted, at the time of commitment, with the ability to project-base an additional 10 percent of units that meet certain requirements. An analysis of impact must be conducted if a PHA is project-basing 50 percent or more of the PHA's authorized voucher units. All PBV units which the PHA has selected (from the time of the proposal or project selection date) or which are under an Agreement to Enter into a HAP Contract (AHAP) or HAP contract for PBV assistance count toward the 20 percent maximum or increased cap. The PHA is responsible for determining the amount of budget authority that is available for project-based vouchers and for ensuring that the amount of assistance that is attached to units is within the amounts available under the ACC. Appendix I of Notice PIH 2017-21 contains a sample PBV program cap calculation worksheet. If PBV units are already selected for project-based

assistance either under an AHAP or a HAP contract, the PHA is not required to reduce the number of units if the number of authorized units is subsequently reduced. Increased Cap [24 CFR 983.6(d)] The PHA may project-base an additional 10 percent of its authorized voucher units above the 20 percent program limit, provided the units meet requirements outlined in 24 CFR 983.6(d)(1) or (2). The units may be distributed among one, all, or a combination of the categories described below, as long as the total number of units does not exceed the 10 percent cap. The PBV HAP contract must specify, and the owner must set aside, the number of units meeting the conditions to qualify for the increased program cap. To qualify for the increased program cap, the unit must be occupied by the type of family specified in the applicable paragraph below. For units under a HAP contract that was first executed on or after April 18, 2017, or added on or after that date to a current HAP contract entered into prior to April 19, 2017, units qualify under the increased program cap if the units meet one or more of the conditions below [24 CFR 983.6(d)(1)]:

• The units are specifically made available to house individuals and families that meet the

definition of homeless under section 103 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11302) and contained in the Continuum of Care Interim Rule at 24 CFR 578.3. - A family qualifies if they were homeless at the time the family first occupies the unit.

• The units are specifically made available to house families that are comprised of or include a

veteran at the time the family first occupies a unit. - A veteran is person who served in the active military, naval, air, or space service, and who was discharged or released therefrom.

• The units provide supportive housing to persons with disabilities or elderly persons as

defined in 24 CFR 5.403. - A disabled or elderly member of the family must be eligible for one or more of the supportive services at the time the family first occupies the unit. The member of the family may choose not to participate in the services. - Supportive housing means that the project makes supportive services available for all of the assisted families in the project and provides a range of services tailored to the needs of the residents occupying such housing. - Such supportive services need not be provided by the owner or onsite but must be reasonably available to the families receiving PBV assistance in the project. - The PHA's administrative plan must describe the type and availability of supportive services the PHA will consider as qualifying for the 10 percent increased cap.

• The units are located in areas where vouchers are difficult to use.
• The units replace, on a different site, units listed in 24 CFR 983.59(b)(1) and (2) for which

the PHA had authority under 24 CFR 983.59 to commit PBV assistance on the original site without the units counting toward the program cap or project cap. The increased program cap also applies to units that are part of a HAP contract executed on or after December 27, 2020, or are added on or after that date to any current HAP contract,

including a contract entered into prior to December 27, 2020, and meet the following requirements [24 CFR 983.6(d)(2)]:

• The units are exclusively made available to eligible youth receiving Family Unification

Program (FUP) or Foster Youth to Independence (FYI) assistance; and

• If the units exclusively made available to eligible youth use FUP assistance that is normally

available for eligible families and youth, the PHA determines and documents that the limitation of the units to youth is consistent with the local housing needs of both eligible FUP populations (families and youth) and amends its administrative plan to specify that FUP PBV assistance is solely for eligible youth.

17-I.D. CAP ON NUMBER OF PBV UNITS IN EACH PROJECT [24 CFR 983.54]

Project Cap [24 CFR 983.54(a)] In general, the PHA may not select a proposal for units in a project or enter into an AHAP or a HAP contract to provide PBV assistance for units in a project if the total number of dwelling units in the project that will receive PBV assistance is more than the greater of 25 units or 25 percent of the number of dwelling units (assisted or unassisted, as adjusted) in the project. Higher Project Cap [24 CFR 983.54(b)] The PHA may provide PBV assistance to the greater of 25 units or 40 percent of the number of dwelling units (assisted and unassisted, as adjusted) in the project if the project is located in an area where vouchers are difficult to use [24 CFR 983.54(b)]. An area where a voucher is difficult to use is defined as:

• A census tract with a poverty rate of 20 percent or less, as determined by HUD;
• A ZIP code area where the rental vacancy rate is less than 4 percent, as determined by HUD;

or

• A ZIP code area where 90 percent of the Small Area FMR is more than 110 percent of the

metropolitan area or county FMR. Exceptions to the Project Cap [24 CFR 983.54(c)] Certain units are removed from the number of dwelling units for purposes of calculating the project cap. These are known as excepted units, which are defined as units in a project not counted toward the project cap because they exclusively service or are made available to certain families. The PHA determines the number of units in the project for which the PHA will provide project- based assistance, including whether and how many units will be excepted. The PBV HAP contract must specify, and the owner must set aside, the number of excepted units made available for occupancy by families who qualify for the exception. For a unit to be considered excepted, it must be occupied by a family who qualifies for the exception.

Which units are considered excepted differs depending on when the HAP contract was executed. Contracts executed prior to April 18, 2017, follow the "old" statutory PBV requirements for excepted units. Projects where the HAP contract was executed on or after April 18, 2017, follow new requirements. In this case, PBV units are not counted toward the project cap if the units are:

• Exclusively for elderly families;
• Exclusively made available to eligible youth receiving FUP or FYI assistance; or
• For households eligible for supportive services available to all families receiving PBV

assistance in the project. A project is not limited to a single exception category but may include excepted units from any of the exception categories.

• Substitute the unit for another unit if it is possible to do so in accordance with 24 CFR

983.207(a), so that the overall number of excepted units or units under the increased program cap in the project is not reduced. The PHA may, in conjunction with such substitution, add the original unit to the HAP contract if it is possible to do so in accordance with 24 CFR 983.207(b), including that such addition does not cause the PHA to exceed the program cap or become non-compliant with the project cap.

• Remove the unit from the PBV HAP contract. In conjunction with the removal, the PHA may

provide the family with tenant-based assistance, if the family is eligible for tenant-based assistance. The family and the owner may agree to use the tenant-based voucher in the unit; otherwise, the family must move from the unit with the tenant-based voucher. If the family later vacates the unit, the PHA may add the unit to the PBV HAP contract in accordance with 24 CFR 983.207.

• Change the unit's status under the project cap or program cap, as applicable, provided that

the change does not cause the PHA to exceed the program cap or become non-compliant with the project cap.

17-I.E. UNITS NOT SUBJECT TO THE PBV PROGRAM CAP OR PROJECT CAP

[FR Notice 1/18/17 and 24 CFR 983.59] For HAP contracts that first became effective on or after April 18, 2017, the PHA may commit project-based assistance to units that meet the requirements below without the units counting toward the program cap (including the 10 percent exception) or project cap. These are known as excluded units and fall into two different categories:

• Existing or Rehabilitation Units: In the five years prior to the request for proposals (RFP)

or the proposal or project selection date (in the case of selection without RFP), these units fall into one of the categories described below, provided that the units are removed from all categories prior to the effective date of the HAP contract. These units include units that received one of the following forms of HUD assistance: - Public Housing Capital or Operating Funds; - Project-Based Rental Assistance (Section 8), including units assisted under Section 8 Moderate Rehabilitation (Mod Rehab) and Mod Rehab Single-Room Occupancy (SRO) programs; - Housing for Elderly (Section 202); - Housing for Persons with Disabilities (Section 811); - Rental Assistance Program (RAP) (Section 236(f)(2) of the National Housing Act); or Flexible Subsidy Program (Section 201 of the Housing and Community Development Amendments of 1978). Or the units have been subject to a federally required rent restriction under one of the following programs: - The Low-Income Housing Tax Credit program (26 U.S.C. 42); - Section 515 Rural Rental Housing Loans (42 U.S.C. 1485); or - The following HUD programs: - Section 236; - Section 221(d)(3) Below Market Interest Rate; - Housing For the Elderly (Section 202 of the Housing Act of 1959); - Housing for Persons with Disabilities (Section 811 of the Cranston-Gonzalez National Affordable Housing Act);

- Flexible Subsidy Program (Section 201 of the Housing and Community Development Amendments Act of 1978); or - Any other program identified by HUD through Federal Register notice subject to public comment.

• Replacement Units: Newly constructed units developed under the PBV program are also

considered excluded units if the primary purpose of the newly constructed units is or was to replace units that meet the criteria listed above. The newly constructed unit must be located on the same site as the unit it is replacing; however, an expansion of or modification to the prior project's site boundaries as a result of the design of the newly constructed project is acceptable as long as a majority of the replacement units are built back on the site of the original project and any replacement units that are not located on the existing site are part of a project that shares a common border with, are across a public right of way from, or touch that site. In addition, in order for the replacement units to be excluded from the program and project caps, one of the following must be true: - Former residents of the original project must be provided with a selection preference that provides the residents with the right of first occupancy at the PBV newly constructed project when it is ready for occupancy; or - Prior to the demolition of the original project, the PBV newly constructed project must have been identified as replacement housing for that original project as part of a documented plan for the redevelopment of the site.

17-I.F. PHA-OWNED UNITS [24 CFR 982.4 and 983.57]

For PHA-owned units (as defined in 24 CFR 982.4), an independent entity (as defined in 24 CFR 982.4) must perform the following functions:

• Determine rent to owner, including rent reasonableness and calculating any rent adjustments

by HUD's Operating Cost Adjustment Factor (OCAF) (where applicable), in accordance with 24 CFR 983.301 through 983.305;

• Perform unit inspections in accordance with 24 CFR 983.103(g);
• When the owner carries out development activity or substantial improvement, the

independent entity must review the evidence and work completion certification submitted by the owner and determine if the units are complete in accordance with 24 CFR 983.156; and

• Determine whether to approve substantial improvement to units under a HAP contract in

accordance with 24 CFR 983.212. The PHA may only compensate the independent entity from PHA ongoing administrative fee income (including amounts credited to the administrative fee reserve). The PHA may not use other program receipts to compensate the independent entity for its services. The PHA and

independent entity may not charge the family any fee for the appraisal, or the services provided by the independent entity.

17-I.G. TENANT-BASED VS. PROJECT-BASED VOUCHER ASSISTANCE

[24 CFR 983.2] Much of the tenant-based voucher program regulations also apply to the PBV program. Consequently, many of the PHA policies related to tenant-based assistance also apply to PBV assistance. The provisions of the tenant-based voucher regulations that do not apply to the PBV program are listed at 24 CFR 983.2(c).

17-I.H. RELOCATION REQUIREMENTS [24 CFR 983.7]

Any persons displaced as a result of implementation of the PBV program must be provided relocation assistance in accordance with the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA)[42 U.S.C. 4201-4655] and implementing regulations at 49 CFR part 24. The cost of required relocation assistance may be paid with funds provided by the owner, local public funds, or funds available from other sources. PHAs may not use voucher program funds to cover relocation costs, except that PHAs may use their administrative fee reserve to pay for relocation expenses after all other program administrative expenses are satisfied, and provided that payment of the relocation benefits is consistent with state and local law. Use of the administrative fee for these purposes must also be consistent with other legal and regulatory requirements, including the requirement in 24 CFR 982.155 and other official HUD issuances. The acquisition of real property for a PBV project is subject to the URA and 49 CFR part 24, subpart B. It is the responsibility of the PHA to ensure the owner complies with these requirements.

17-I.I. EQUAL OPPORTUNITY REQUIREMENTS [24 CFR 983.8]

The PHA must comply with all equal opportunity requirements under federal law and regulations in its implementation of the PBV program. This includes the requirements and authorities cited at 24 CFR 5.105(a). In addition, the PHA must comply with the PHA Plan certification on civil rights and affirmatively furthering fair housing, submitted in accordance with 24 CFR 903.7(o).

Part Ii: Proposal And Project Selection

17-II.A. OVERVIEW

The PHA must include a description of the circumstances under which the PHA will use noncompetitive selection for PBV projects and competitive selection for PBV proposals, including the procedures for submission and selection of such proposals, in the administrative plan [24 CFR 983.10(b)(3)]. Before selecting a PBV proposal, the PHA must determine that the PBV proposal complies with HUD program regulations and requirements, including a determination that the property is eligible housing [24 CFR 983.52 and 983.53], complies with the cap on the number of PBV units per project [24 CFR 983.54], and meets the site selection standards [24 CFR 983.55]. The PHA may not commit PBVs until or unless it has followed the proposal selection requirements defined in 24 CFR 983.51. The PHA may allow for entities that have site control to submit proposals provided the entity will be the owner prior to entering into the AHAP or HAP contract. An owner may submit, and a PHA may select, a single proposal covering multiple projects where each project consists of a single-family building, provided all projects are the same housing type (existing, rehabilitated, or newly constructed) [24 CFR 983.51(a)]. A PHA may not commit project-based assistance to a project if the owner or any principal or interested party is debarred, suspended subject to a limited denial of participation, or otherwise excluded under 2 CFR Part 2424 or is listed on the U.S. General Services Administration list of parties excluded from federal procurement or non-procurement programs. HUD approval of specific projects or owners is not required. For example, owner proposal selection does not require submission of form HUD-2530 (Previous Participation Certification) or other HUD previous participation clearance. Selection of PHA-Owned Units [24 CFR 983.51(h)] A PHA-owned unit (as defined in 24 CFR 982.4) may be assisted under the PBV program only if the HUD field office or HUD-approved independent entity reviews the selection process and determines that the PHA-owned units were appropriately selected based on the selection procedures specified in the PHA's administrative plan.

With the exception of projects selected in accordance with 24 CFR 983.51(c) (projects that meet the criteria to be excepted from competitive selection), the PHA's selection procedures must be designed in a manner that does not effectively eliminate the submission of proposals for non- PHA-owned units or give preferential treatment (e.g., additional points) to PHA-owned units.17- II.B. COMPETITIVE SELECTION OF PROPOSALS [24 CFR 983.51(b)] The PHA must select PBV proposals in accordance with the selection procedures in the PHA administrative plan. The PHA must select PBV proposals by either of the following two methods.

• PHA request for PBV Proposals. The PHA may solicit proposals by using a request for

proposals (RFP) to select proposals on a competitive basis in response to the PHA request. The PHA may not limit proposals to a single site or impose restrictions that explicitly or

practically preclude owner submission of proposals for PBV housing on different sites. The PHA may establish selection procedures that combine or are in conjunction with other federal, state, or local government housing assistance, community development, or supportive services competitive selection processes. If the PHA selection process is combined and administered in conjunction with another RFP process, the PHA remains responsible for complying with proposal selection procedures as described in 24 CFR 983.51.

• The PHA may select, without issuing an RFP, proposals that were previously selected based

on a competition. This may include selection of a proposal for housing assisted under a federal, state, or local government housing assistance program that was subject to a competition in accordance with the requirements of the applicable program, community development program, or supportive services program that requires competitive selection of proposals (e.g., HOME, and units for which competitively awarded LIHTCs have been provided), where the proposal has been selected in accordance with such program's competitive selection requirements within three years of the PBV proposal selection date, and the earlier competitive selection proposal did not involve any consideration that the project would receive PBV assistance. The PHA need not conduct another competition. Solicitation and Selection of PBV Proposals [24 CFR 983.51(d)] PHA procedures for selecting PBV proposals must be designed and actually operated to provide broad public notice of the opportunity to offer PBV proposals for consideration by the PHA. The public notice procedures may include publication of the public notice in a local newspaper of general circulation and other means designed and actually operated to provide broad public notice. The public notice of the PHA request for PBV proposals must specify the submission deadline. Detailed application and selection information must be provided at the request of interested parties.

In order for the proposal to be considered, the owner must submit the proposal to the Authority by the published deadline date, and the proposal must respond to all requirements as outlined in the RFP and be in compliance with all HUD program requirements. Incomplete proposals will not be reviewed. The Authority reserves the right to reject applications at any time for misinformation, errors, or omissions of any kind. The Authority will rate and rank proposals for rehabilitated and newly constructed housing using the following criteria: Owner experience and capability to build or rehabilitate housing as identified in the RFP; Extent to which the project furthers the Authority goal of deconcentrating poverty and expanding housing and economic opportunities; If applicable, the extent to which services for special populations are provided on site or in the immediate area for occupants of the property; and In order to promote partially assisted projects, projects where less than 25 percent of the units will be assisted will be rated higher than projects where 25 percent or more of the units will be assisted. In the case of projects for occupancy by the elderly, persons with disabilities or families needing other services, the Authority will rate partially assisted projects on the percentage of units assisted. Projects with the lowest percentage of assisted units will receive the highest score. PHA Requests for Proposals for Existing Housing Units The Authority will advertise its request for proposals (RFP) for existing housing in the local newspaper of general circulation, and may also include minority media, and other suitable means, including the Authority's website at www.merced-pha.com. The advertisement will state the number of vouchers available to be project-based, the type of units that will be considered, the submission deadline, and will note how to obtain the full RFP with information on the application and selection process. Advertisements will also contain a statement that participation in the PBV program requires compliance with Fair Housing and Equal Opportunity (FHEO) requirements. In addition, the Authority will post the notice inviting such proposal submission and the rating and ranking procedures on its website. The Authority will periodically publish its advertisement as mentioned above for at least one day per week for three consecutive weeks. The advertisement will specify the number of units the Authority estimates that it will be able to assist under the funding the Authority is making available. Proposals will be due in the Authority office by the published deadline date and will be evaluated using the following criteria: Experience as an owner in the tenant-based voucher program and owner compliance with the owner's obligations under the tenant-based program; Extent to which the project furthers the Authority goal of deconcentrating poverty and expanding housing and economic opportunities;

If applicable, extent to which services for special populations are provided on site or in the immediate area for occupants of the property; and Extent to which units are occupied by families that are eligible to participate in the PBV program. PHA Selection of Proposals Subject to a Previous Competition under a Federal, State, or Local Housing Assistance Program The Authority will accept proposals for PBV assistance from owners that were competitively selected under another federal, state or local housing assistance program, including projects that were competitively awarded Low-Income Housing Tax Credits (if the earlier competition did not involve any consideration that the project would receive PBV assistance) on an ongoing basis. The Authority may periodically advertise that it is accepting proposals in the local newspaper of general circulation, and may also include minority media, and other suitable means, including the Authority's website at www.merced-pha.com. The advertisement will state the number of vouchers available to be project-based, the type of units that will be considered, the submission deadline, and will note how to obtain the full RFP with information on the application and selection process. Advertisements will also contain a statement that participation in the PBV program requires compliance with Fair Housing and Equal Opportunity (FHEO) requirements. In addition to, or in place of advertising, the Authority may also directly contact specific owners that have already been selected for Federal, state, or local housing assistance based on a previously held competition, to inform them of available PBV assistance. Proposals will be due in the Authority office by the published deadline date and the Authority will evaluate each proposal on its merits using the following factors: Extent to which the project furthers the Authority goal of deconcentrating poverty and expanding housing and economic opportunities; and Extent to which the proposal complements other local activities such as the redevelopment of a public housing site under the HOPE VI program, the HOME program, CDBG activities, other development activities in a HUD-designated Enterprise Zone, Economic Community, Choice Neighborhood, or Renewal Community.

17-II.C. NON-COMPETITIVE PROJECT SELECTION [24 CFR 983.51(c)]

The PHA may select units without a competitive selection process in certain circumstances described in 24 CFR 983.51(c) and FR Notice 8/13/24. Prior to selecting units based on the below criteria, the PHA must notify the public of its intent to noncompetitively select one or more projects for PBV assistance through its 5-Year Plan. If this requirement is not met, the PHA may not select units non-competitively. The PHA may select units for PBV assistance without following a competitive process in the following circumstances:

• The PHA may select existing, newly constructed, or rehabilitated public housing projects

where the PHA has an ownership interest or over which the PHA has control, when the PHA is engaged in an initiative to improve, develop, or replace a public housing property or site. - The public housing units may either currently be in the public housing inventory or may have been removed from the public housing inventory through any available legal removal tool within five years of the project selection date.

• The PHA may select for future PBV assistance a project currently under the public housing

program, or a project that is replacing the public housing project, in which a PHA has no ownership interest, or which a PHA has no control over, provided: - The public housing project is either still in the public housing inventory or had been removed from the public housing inventory through any available legal removal tool within five years of the project selection date; - The PHA that owned or owns the public housing project does not administer the HCV program; - The project selected for PBV assistance was specifically identified as replacement housing for the impacted public housing residents as part of the public housing demolition/disposition application, voluntary conversion application, or any other application process submitted to and approved by HUD to remove the public housing project from the public housing inventory; and - With respect to replacement housing, the PHA does not have to replace the housing on the same site as the original public housing, but the number of contract units in the replacement project may not exceed the number of units in the original public housing project by more than a de minimis amount for this exception to apply.

• The PHA may select a project consisting of PHA-owned units as defined at 24 CFR 982.4.

- The units must continue to meet the definition of PHA-owned for the initial two years of the HAP contract unless there is a transfer of ownership approved by HUD.

• The PHA may select a project that underwent an eligibility event within five years of the

project selection date, in which a family (or families) qualifies for enhanced voucher assistance and provided informed consent to relinquish its enhanced voucher for PBV assistance.

• The PHA may select one or more PBV projects with units made exclusively available to

VASH families on the site of a VA facility [FR Notice 8/13/24]. - The method of project selection must comply with all other requirements under 24 CFR 983.51, including that the PHA must notify the public of its intent to noncompetitively select one or more projects for PBV assistance through its 5-Year Plan and to ensure any project selection is consistent with the PHA administrative plan.

submission and selection to address under what circumstances the Authority will use this method.

17-II.D. PROJECT OR PROPOSAL SELECTION [24 CFR 983.51(f) and

24 CFR 983.153(c)(3)] Inspections Required Prior to Project or Proposal Selection [24 CFR 983.51(e)] The PHA must examine the proposed site before the proposal or project selection date to determine whether the site complies with the site selection standards outlined in 24 CFR 983.55. The PHA may execute a HAP contract for existing housing if:

• All proposed contract units in the project fully or substantially comply with housing quality

standards on the proposal or project selection date, which the PHA must determine via inspection;

• The project meets the environmental review requirements at 24 CFR 983.56, if applicable;

and

• The project meets the initial inspection requirements in accordance with 24 CFR 983.103(c).

PHA Written Notice of Proposal or Project Selection [24 CFR 983.51(f) and (h) and 24 CFR 983.153(c)(3)] Regardless of the method of selection, the PHA is required to provide written notice of proposal or project selection, which must include:

• If the project contains PHA-owned units, the PHA must provide the written notice of

proposal or project selection to the responsible PHA official, and that official must certify in writing that the PHA accepts the terms and requirements stated in the notice. The PHA must make documentation available for public inspection regarding the basis for the PHA selection of a PBV proposal.

• When an environmental review is required, if the review has not been conducted prior to the

project or proposal selection date, the PHA's written notice that the selection is subject to completion of a favorable environmental review and that the project or proposal may be rejected based on the results of the environmental review.

• For newly constructed housing and rehabilitated housing in projects to which labor standards

apply, the PHA's written notice to the party that submitted the selected proposal or board resolution approving project-basing of assistance at the specific project must state that any construction contracts must incorporate a Davis-Bacon contract clause and the current applicable prevailing wage determination [24 CFR 983.153(c)(3)]. In addition to the requirements above, for selection of proposals through competitive methods, the PHA must give prompt written notice to the party that submitted a selected proposal and must also give prompt public notice of such selection. Public notice procedures may include publication of public notice in a local newspaper of general circulation and other means designed and actually operated to provide broad public notice. The proposal selection date is the date on which the PHA provides written notice to the party that submitted the selected proposal. The written notice of proposal selection must require the owner or party that submitted the selected proposal to provide a written response to the PHA accepting the terms and requirements stated in

the notice. The PHA must make documentation available for public inspection regarding the basis for the PHA selection of a PBV proposal.

In addition to the requirements above, for projects selected under an exception to the competitive process under 24 CFR 983.51(c), the PHA must give prompt written notice of project selection to the owner following the PHA board's resolution approving the project-basing of assistance at the specific project. The project selection date is the date of the PHA's board resolution approving the project-basing of assistance at the specific project. The written notice of project selection must require the owner of the project selected to provide a written response to the PHA accepting the terms and requirements stated in the notice.

17-II.E. HOUSING TYPE [24 CFR 983.52]

The PHA must decide what housing type, new construction, rehabilitation, or existing housing, will be used to develop project-based housing. The PHA choice of housing type must be reflected in its solicitation for proposals. With certain exceptions, the PHA may not execute a HAP contract for units:

• On which construction or rehabilitation commenced after the date of proposal submission

(for housing subject to competitive selection) or the date of the PHA's board resolution approving the project-basing of assistance at the project (for housing excepted from competitive selection); and

• Prior to the effective date of an AHAP.

However, HUD makes an exception in the following circumstances:

• The PHA has exercised its discretion under 24 CFR 983.154(f) to undertake development

activity without an AHAP; or

• The PHA has executed an AHAP after construction or rehabilitation that complied with

applicable requirements of 24 CFR 983.153 has commenced; or

• The PHA will undertake development activity after execution of the HAP contract as

authorized under 24 CFR 983.157. At HUD's sole discretion, HUD may approve a PHA's request for additional exceptions to this prohibition.

17-II.F. PROHIBITION OF ASSISTANCE FOR CERTAIN UNITS

Ineligible Units [24 CFR 983.52] A HAP contract must not be effective and no PBV assistance may be provided for any of the following: shared housing units; units on the grounds of a penal reformatory, medical, mental, or similar public or private institution; nursing homes or facilities providing continuous psychiatric, medical, nursing services, board and care, or intermediate care (except that assistance may be provided in assisted living facilities); units that are owned or controlled by an educational institution or its affiliate and are designated for occupancy by students; and transitional housing. Manufactured homes are ineligible only if the manufactured home is not permanently affixed to a permanent foundation or the owner does not own fee title to the real property (land) on which the manufactured home is located. In addition, the PHA may not attach or pay PBV assistance for a unit occupied by an owner of the housing. A member of a cooperative who owns shares in the project assisted under the PBV program is not considered an owner for purposes of participation in the PBV program. Before a PHA places a specific unit under a HAP contract, the PHA must determine whether the unit is occupied and, if occupied, whether the unit's occupants are eligible for assistance in accordance with 24 CFR 982.201. For a family to be eligible for assistance in the specific unit, the unit must be appropriate for the size of the family under the PHA's subsidy standards and the total tenant payment (TTP) for the family must be less than the gross rent for the unit. The PHA must not enter into a HAP contract for a unit occupied by a family ineligible for participation in the PBV program. However, unlike in the regular PBV program, the PHA may opt to select an occupied unit or admit a family to a unit if such unit is made exclusively available to VASH families if the PBV project is either on the grounds of a VA facility or there are VASH supportive services provided on-site at the project. See Chapter 19 for more information. Subsidized Housing [24 CFR 983.53] A HAP contract must not be effective and no PBV assistance may be provided in any of the following types of subsidized housing:

• A public housing unit;
• A unit subsidized with any other form of Section 8 assistance;
• A unit subsidized with any governmental rent subsidy (a subsidy that pays all or any part of

the rent);

• A unit subsidized with any governmental subsidy that covers all or any part of the operating

costs of the housing;

• A unit subsidized with rental assistance payments under Section 521 of the Housing Act of

1949, 42 U.S.C. 1490a (a Rural Housing Service Program). However, the PHA may attach assistance for a unit subsidized with Section 515 interest reduction payments (42 U.S.C. 1485);

• A Section 202 project for non-elderly with disabilities;
• Section 811 project-based supportive housing for persons with disabilities;
• Section 202 supportive housing for the elderly;
• A Section 101 rent supplement project;
• A unit subsidized with any form of tenant-based rental assistance; or
• A unit with any other duplicative federal, state, or local housing subsidy, as determined by

HUD or the PHA in accordance with HUD requirements. For this purpose, housing subsidy does not include the housing component of a welfare payment; a social security payment; or a federal, state, or local tax concession (such as relief from local real property taxes).

17-II.G. SUBSIDY LAYERING REQUIREMENTS [24 CFR 983.11, CFR 983.153(b), 24

CFR 4.13, Notice PIH 2013-11, and FR Notice 3/13/23]

Development Activity Before HAP Contract [24 CFR 983.153(b)] As part of the PBV project or proposal selection process, the project owner must disclose information regarding all HUD and/or other federal, state, or local governmental assistance committed to the project, as well as other governmental assistance, using Form HUD-2880 (even if no other governmental assistance is received or anticipated) [FR Notice 3/3/23]. HUD requires a subsidy layering review (SLR) be conducted when new construction or rehabilitation housing will include PBVs in combination with other governmental housing assistance from federal, state, or local agencies, including assistance such as tax concessions or tax credits. The SLR must occur before the PHA attaches PBV assistance to a project. This means when an SLR is required, the PHA may not execute an AHAP or HAP contract until HUD or a HUD-approved housing credit agency (HCA) has conducted the required subsidy layering review and determined the project compliance with 24 CFR 4.13 and other related regulation requirements with regards to attaching PBV assistance. Subsidy layering requirements also do not apply to existing housing when PBV is the only governmental assistance. Conducting the SLR [FR Notice 3/3/23 and Notice PIH 2023-15] PHAs request an SLR through their local HUD Field Office or, if eligible, through a participating HCA. The PHA is responsible for collecting all required documentation for the SLR from the project owner. Appendix A of FR Notice 3/23/23 contains a list of all required documentation. The owner must inform the PHA if any information changes during or after the application process. If new information becomes available after initial submission, the PHA is responsible for submitting updated information to HUD or the HCA. If HUD completes the SLR and determines the PBV assistance complies with all requirements, HUD will notify the PHA in writing. If the SLR request is submitted to an approved HCA, and the proposed project-based voucher assistance meets HUD subsidy layering requirements, the

HCA must submit a certification to HUD and notify the PHA. The PHA may proceed to execute an AHAP at that time if the environmental approval is received. Additional Assistance after HAP Contract [24 CFR 983.11(d)] The HAP contract must contain the owner's certification that the project has not received and will not receive (before or during the term of the HAP contract) any public assistance for acquisition, development, or operation of the housing other than assistance disclosed in the subsidy layering review in accordance with HUD requirements, unless the owner discloses additional assistance in accordance with HUD requirements [24 CFR 983.11(d)]. For newly constructed or rehabilitated housing under a HAP contract, the owner must disclose to the PHA information regarding any additional related assistance from the federal government, a state, or a unit of general local government, or any agency or instrumentality thereof. Related assistance includes but is not limited to any loan, grant, guarantee, insurance, payment, rebate, subsidy, credit, tax benefit, or any other form of direct or indirect assistance. If the additional related assistance meets certain threshold and other requirements established by HUD, a subsidy layering review may be required to determine if it would result in excess public assistance to the project. The PHA must adjust the amount of the housing assistance payments to the owner to compensate in whole or in part for such related assistance.

17-II.H. SITE SELECTION STANDARDS

Compliance with PBV Goals, Civil Rights Requirements, and Site and Neighborhood Standards [24 CFR 983.55(b)] The PHA may not select a project or proposal for existing, newly constructed, or rehabilitated PBV housing on a site or enter into an AHAP or HAP contract for units on the site, unless the PHA has determined that PBV assistance for housing at the selected site is consistent with the goal of deconcentrating poverty and expanding housing and economic opportunities. The standard for deconcentrating poverty and expanding housing and economic opportunities must be consistent with the PHA Plan under 24 CFR 903 and the PHA administrative plan. In addition, prior to selecting a proposal, the PHA must determine that the site is suitable from the standpoint of facilitating and furthering full compliance with the applicable Civil Rights Laws, regulations, and Executive Orders, and that the site meets the housing quality standards and neighborhood standards at 24 CFR 5.703.

A census tract in which the proposed PBV development will be located in a HUD- designated Enterprise Zone, Economic Community, Choice Neighborhood, or Renewal Community; A census tract where the concentration of assisted units will be or has decreased as a result of public housing demolition and HOPE VI redevelopment; A census tract in which the proposed PBV development will be located is undergoing significant revitalization as a result of state, local, or federal dollars invested in the area; A census tract where new market rate units are being developed where such market rate units will positively impact the poverty rate in the area; A census tract where there has been an overall decline in the poverty rate within the past five years; or A census tract where there are meaningful opportunities for educational and economic advancement. The Authority will also consider whether the site is suitable from the standpoint of facilitating and furthering full compliance with the applicable provisions of Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d(4)) and HUD's implementing regulations at 24 CFR Part 1; Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601- 3629) and HUD's implementing regulations at 24 CFR Parts 100 through 199; Executive Order 11063 (27 FR 11527; 3 CFR, 1959-1963 Comp., p. 652), and HUD's implementing regulations at 24 CFR Part 107. The site must also be suitable from the standpoint of facilitating and furthering full compliance with the applicable provisions of the Americans with Disabilities Act (42 U.S.C. 12131-12134) and implementing regulations (28 CFR Part 35), and Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and HUD's implementing regulations at 24 CFR Part 8, including meeting the Section 504 site selection requirements described in 24 CFR 8.4(b)(5). The Authority will also consider whether the site and neighborhood are reasonably free from disturbing noises and reverberations and other dangers to the health, safety, and general welfare of the occupants. The site and neighborhood may not be subject to serious adverse environmental conditions, natural or manmade, that could affect the health or safety of the project occupants, such as dangerous walks or steps; contamination; instability; flooding, poor drainage, septic tank back-ups or sewage hazards; mudslides; abnormal air pollution, smoke or dust; excessive noise, vibration or vehicular traffic; excessive accumulations of trash; vermin or rodent infestation; or fire hazards.

Existing and Rehabilitated Housing Site and Neighborhood Standards [24 CFR 983.57(d)] The PHA may not enter into an AHAP or HAP for existing or rehabilitated housing until it has determined that the site complies with the HUD required site and neighborhood standards. The site must:

• Be adequate in size, exposure, and contour to accommodate the number and type of units

proposed;

• Have adequate utilities and streets available to service the site;
• Promote a greater choice of housing opportunities and avoid undue concentration of assisted

persons in areas containing a high proportion of low-income persons;

• Be accessible to social, recreational, educational, commercial, and health facilities and

services and other municipal facilities and services equivalent to those found in neighborhoods consisting largely of unassisted similar units; and

• Be located so that travel time and cost via public transportation or private automobile from

the neighborhood to places of employment is not excessive. New Construction Site and Neighborhood Standards [24 CFR 983.5 5(e)] In order to be selected for PBV assistance, a site for newly constructed housing must meet the following HUD required site and neighborhood standards:

• The site must be adequate in size, exposure, and contour to accommodate the number and

type of units proposed;

• The site must have adequate utilities and streets available to service the site;
• The site must not be located in an area of minority concentration unless the PHA determines

that sufficient, comparable opportunities exist for housing for minority families in the income range to be served by the proposed project outside areas of minority concentration or that the project is necessary to meet overriding housing needs that cannot be met in that housing market area;

• The site must not be located in a racially mixed area if the project will cause a significant

increase in the proportion of minority to non-minority residents in the area.

• The site must promote a greater choice of housing opportunities and avoid undue

concentration of assisted persons in areas containing a high proportion of low-income persons;

• The neighborhood must not be one that is seriously detrimental to family life or in which

substandard dwellings or other undesirable conditions predominate, unless there is actively in progress a concerted program to remedy the undesirable conditions;

• The housing must be accessible to social, recreational, educational, commercial, and health

facilities and services and other municipal facilities and services equivalent to those found in neighborhoods consisting largely of unassisted similar units; and

• Except for housing designed for elderly persons, the housing must be located so that travel

time and cost via public transportation or private automobile from the neighborhood to places of employment is not excessive.

17-II.I. ENVIRONMENTAL REVIEW [24 CFR 983.56]

The PHA activities under the PBV program are subject to HUD environmental regulations in 24 CFR parts 50 and 58, other than where exceptions are provided in the PBV regulations. For projects or proposals that were selected in accordance with the site selection standards at 24 CFR 983.55 in effect on or after June 6, 2024, no environmental review is required to be undertaken before entering into a HAP contract for existing housing, except to the extent a Federal environmental review is required by law or regulation relating to funding other than PBV. When an environmental review is required, the responsible entity is responsible for performing the federal environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). If the review has not been conducted prior to the proposal or project selection date, then the PHA's written notice of proposal or project selection must state that the selection is subject to completion of a favorable environmental review and that the project may be rejected based on the results of the environmental review. The PHA may not enter into an AHAP or HAP contract until the responsible entity has complied with the environmental review requirements. The PHA may not enter into an AHAP or a HAP contract with an owner, and the PHA, the owner, and its contractors may not acquire, rehabilitate, convert, lease, repair, dispose of, demolish, or construct real property or commit or expend program or local funds for PBV activities under this part, until one of the following occurs:

• The responsible entity has determined that the activities to be undertaken are exempt under

24 CFR 85.34(a) or categorically excluded and not subject to compliance with environmental laws under 24 CFR 58.35(b);

• The responsible entity has completed the environmental review procedures required by 24

CFR Part 58, and HUD has approved the PHA's Request for Release of Funds and Certification (form HUD-7015.15) - HUD approves the Request for Release of Funds and Certification by issuing a Letter to Proceed or form HUD-7015.16, thereby authorizing the PHA to execute an AHAP or HAP contract, as applicable; or HUD has performed an environmental review under 24 CFR Part 50 and has notified the PHA in writing of environmental clearance. The PHA must supply all available, relevant information necessary for the responsible entity to perform any required environmental review for any site. The PHA must require the owner to carry out mitigating measures required by the responsible entity (or HUD, if applicable) as a result of the environmental review.

Part Iii: Dwelling Units

17-III.A. OVERVIEW

This part identifies the special housing quality standards that apply to the PBV program, housing accessibility for persons with disabilities, and special procedures for conducting inspections.

17-III.B. HOUSING QUALITY STANDARDS [24 CFR 983.101]

Housing quality standards for the tenant-based program, including those for special housing types, generally apply to the PBV program. housing quality standards requirements for shared housing, manufactured home space rental, and the homeownership option do not apply because these housing types are not assisted under the PBV program. The owner is required to maintain and operate the contract units and premises in accordance with housing quality standards, including performance of ordinary and extraordinary maintenance. The owner must provide all the services, maintenance, equipment, and utilities specified in the HAP contract with the PHA and in the lease with each assisted family. In addition, maintenance, replacement and redecoration must be in accordance with the standard practice for the building as established by the owner. Lead-based Paint [24 CFR 983.101(c)] The lead-based paint requirements for the tenant-based voucher program do not apply to the PBV program. Instead, The Lead-based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing regulations at 24 CFR Part 35, Subparts A, B, H, and R, and 40 CFR 745.227, apply to the PBV program. Housing Quality and Design Requirements [24 CFR 983.101(e) and 983.208(a)] The PHA may elect to establish additional requirements for quality, architecture, or design of PBV housing. Any such additional requirements must be specified in the AHAP and the HAP contract. These requirements must be in addition to, not in place of, compliance with housing quality standards. The PHA must specify the conditions under which it will require additional housing quality requirements in the administrative plan.

17-III.C. HOUSING ACCESSIBILITY FOR PERSONS WITH DISABILITIES

[24 CFR 983.102] The housing must comply with program accessibility requirements of section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR part 8. The PHA must ensure that the percentage of accessible dwelling units complies with the requirements of section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as implemented by HUD's regulations at 24 CFR 8, subpart C.

Housing first occupied after March 13, 1991, must comply with design and construction requirements of the Fair Housing Amendments Act of 1988 and implementing regulations at 24 CFR 100.205, as applicable. (24 CFR 983.102)

17-III.D. INSPECTING UNITS [24 CFR 983.103]

The PHA must inspect contract units whenever needed to determine that the contract units comply with housing quality standards and that the owner is providing maintenance, utilities, and other services in accordance with the HAP contract. The PHA must take into account complaints and any other information coming to its attention in scheduling inspections. Pre-selection Inspection [24 CFR 983.103(a)] If the units to be assisted already exist, the PHA must inspect all the units before the proposal selection date and must determine if the project meets the definition of existing housing. If the project is existing housing, the PHA may not execute the HAP contract until the units meet the initial inspection requirements in accordance with 24 CFR 983.103(c). Initial Inspection: Newly Constructed and Rehabilitated Projects That Underwent Substantial Improvement [24 CFR 983.103(b)] Following completion of work pursuant to 24 CFR 983.155, the PHA must complete the following inspections, as applicable:

• For rehabilitated housing that is developed prior to the HAP contract term or newly

constructed housing, the PHA must inspect each proposed newly constructed and rehabilitated PBV unit before execution of the HAP contract. Each proposed PBV unit must fully comply with housing quality standards prior to HAP contract execution.

• For rehabilitated housing that will undergo development activity after HAP contract

execution, the PHA must conduct unit inspections in accordance with the requirements of 24 CFR 983.157.

• For units that underwent substantial improvement pursuant to 24 CFR 983.207(d) or

983.212, inspect each unit. Each PBV unit that underwent substantial improvement must fully comply with housing quality standards prior to the PHA adding the unit to the HAP contract, returning the unit temporarily removed to the HAP contract, allowing re-occupancy of the unit, and resuming housing assistance payments, as applicable.

Initial Inspection: Existing Housing [24 CFR 983.103(c)] The PHA must inspect and determine that all of the proposed PBV units fully comply with housing quality standards before entering into the HAP contract, unless the PHA has adopted a policy to enter into a HAP contract for units that fail the initial inspection as a result of only non- life-threatening conditions (NLT option), or if the unit passed an alternative inspection, or both. The PHA must establish in its administrative plan the amount of time that may elapse between the initial inspection of existing housing and execution of a HAP contract for that unit.

Part Iv: Rehabilitated And Newly Constructed Units

17-IV.A. OVERVIEW [24 CFR 983.151 and 983.152]

There are specific requirements that apply to PBV assistance for newly constructed or rehabilitated housing that do not apply to PBV assistance in existing housing. This part describes the requirements unique to this type of assistance. Housing selected for this type of assistance may not at a later date be selected for PBV assistance as existing housing.

17-IV.B. AGREEMENT TO ENTER INTO HAP CONTRACT (AHAP) [24 CFR 983.154]

Except where the PHA decides not to use an AHAP or chooses to execute an AHAP after construction or rehabilitation has commenced, the PHA and owner must enter into an AHAP that will govern development activity. In the AHAP, the owner agrees to develop the PBV contract units to comply with housing quality standards, and the PHA agrees that upon timely completion of development in accordance with the terms of the AHAP, the PHA will enter into a HAP contract with the owner for the contract units. The AHAP must cover a single project, except one AHAP may cover multiple projects that each consist of a single-family building. The effective date of the AHAP must be on or after the date the AHAP is executed. The AHAP must be executed and effective prior to the commencement of development activity as described in 24 CFR 983.154(d), except where the PHA decides not to use an AHAP or chooses to execute an AHAP after construction or rehabilitation has commenced. The AHAP must be in the form required by HUD. The PHA and owner may agree to amend the contents of the AHAP by executing an addendum, so long as such amendments are consistent with all PBV requirements. The PHA and owner may only execute an addendum affecting a unit prior to the PHA accepting the completed unit. Development activity must not commence after the date of proposal submission (for housing subject to competitive selection) or the date of the PHA's board resolution approving the project- basing of assistance at the project (for housing excepted from competitive selection) and before the effective date of the AHAP, except where the PHA decides not to use an AHAP or chooses to execute an AHAP after construction or rehabilitation has commenced. In the case of new construction, development activity begins with excavation or site preparation (including clearing of the land). Rehabilitation begins with the physical commencement of rehabilitation activity on the housing. PHA Discretion Not to Use an AHAP [24 CFR 983.154(f)] The PHA may decide not to use an AHAP or may choose to execute an AHAP after construction or rehabilitation that complied with applicable requirements of 24 CFR 983.153 has commenced. To do so, the PHA must explain the circumstances (if any) under which the PHA will enter into a PBV HAP contract for newly constructed or rehabilitated housing without first entering into an AHAP and under which the PHA will enter into an AHAP after construction or rehabilitation has commenced.

Authority Policy

The Authority will not exercise its discretion to not use an AHAP or to execute an AHAP after construction or rehabilitation.

Content of the AHAP [24 CFR 983.152(e)] At a minimum, the Agreement must describe the following features of the housing to be developed and assisted under the PBV program:

• Site and the location of the contract units;
• Number of contract units by area (square footage) and number of bedrooms and bathrooms;
• Services, maintenance, or equipment to be supplied by the owner without charges in addition

to the rent to owner;

• Utilities available to the contract units, including a specification of utility services to be paid

by the owner (without charges in addition to rent) and utility services to be paid by the tenant;

• An indication of whether or not the design and construction requirements of the Fair Housing

Act and section 504 of the Rehabilitation Act of 1973 apply to units under the AHAP. If applicable, any required work item resulting from these requirements must be included in the description of work to be performed under the AHAP;

• A description of any required work item if the requirement to install broadband infrastructure

applies;

• Estimated initial rents to owner for the contract units;
• Description of the work to be performed under the AHAP.

 For rehabilitated units, the description must include the rehabilitation work write up and, where determined necessary by the PHA, specifications and plans.  For new construction units, the description must include the working drawings and specifications.

• Any additional requirements for quality, architecture, or design over and above housing

quality standards. The PHA must specify the conditions under which it will require additional housing quality requirements in the administrative plan. Execution of the AHAP [FR Notice 11/24/08] The AHAP must be executed promptly after PHA notice of proposal selection to the selected owner.

17-IV.C. DEVELOPMENT REQUIREMENTS

Labor Standards [24 CFR 983.154(c)]

If an AHAP covers the development of nine or more contract units (whether or not completed in stages), the owner and the owner's contractors and subcontractors must pay Davis-Bacon wages to laborers and mechanics employed in the development of housing. Further, these Davis-Bacon requirements apply to existing PBV units when the nature of any work to be performed either before the execution of the HAP contract or within 18 months after execution constitutes project development. Any development initiated on existing units within 18 months after the effective date of the HAP contract on projects with nine or more contract units triggers Davis-Bacon requirements. When the PHA exercises its discretion at 24 CFR 983.154(f) or 983.157(a) to allow the owner to conduct some or all development activity while the proposed PBV units are not under an AHAP or HAP contract, the applicable parties must comply with the labor standards outlined above from the date of proposal submission (for housing subject to competitive selection) or from the date of the PHA's board resolution approving the project-basing of assistance at the project (for housing excepted from competitive selection). The AHAP will include the labor standards clauses required by HUD, such as those involving Davis-Bacon wage rates. The addendum to the HAP contract, Form HUD-5679, also includes the required labor standards clauses. The owner, contractors, and subcontractors must also comply with the Contract Work Hours and Safety Standards Act, Department of Labor regulations in 29 CFR part 5, and other applicable federal labor relations laws and regulations. The PHA must monitor compliance with labor standards. For any project to which labor standards apply, the PHA's written notice to the party that submitted the selected proposal or board resolution approving project-basing of assistance at the specific project must state that any construction contracts must incorporate a Davis-Bacon contract clause and the current applicable prevailing wage determination. Development activity is also subject to the federal equal employment opportunity requirements of Executive Orders 11246 as amended (3 CFR, 1964-1965 Comp., p. 339), 11625 (3 CFR, 1971-1975 Comp., p. 616), 12432 (3 CFR, 1983 Comp., p. 198), and 12138 (3 CFR, 1977 Comp., p. 393). Accessibility [24 CFR 983.153(e)] As applicable, the design and construction requirements of the Fair Housing Act and implementing regulations at 24 CFR 100.205; the accessibility requirements of Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR Part 8, including 8.22 and 8.23; and Title II of the Americans with Disabilities Act (42 U.S.C. 12131- 12134) and implementing regulations at 28 CFR Part 35, including 24 CFR 35.150 and 35.151, apply to development activity. A description of any required work item resulting from these requirements must be included in the AHAP (if applicable) or HAP contract (if applicable).

Broadband Infrastructure [24 CFR 983.153(f)] Any development activity that constitutes substantial rehabilitation (as defined by 24 CFR 5.100) of a building with more than four rental units and where the proposal or project selection date or the start of the development activity while under a HAP contract is after January 19, 2017, must include installation of broadband infrastructure, as defined in 24 CFR 5.100, except where the owner determines and documents the determination that:

• The location of the new construction or substantial rehabilitation makes installation of

broadband infrastructure infeasible;

• The cost of installing broadband infrastructure would result in a fundamental alteration in the

nature of its program or activity or in an undue financial burden; or

• The structure of the housing to be substantially rehabilitated makes installation of broadband

infrastructure infeasible. A description of any required work item resulting from this requirement must be included in the AHAP (if applicable) or HAP contract (if applicable). Owner Disclosure [24 CFR 983.153(g)] The AHAP and HAP contract must include a certification by the owner that the owner and other project principals are not on the U.S. General Services Administration list of parties excluded from federal procurement and non-procurement programs. The owner must also disclose any possible conflict of interest that would be a violation of the AHAP, the HAP contract, or HUD regulations.

17-IV.D. COMPLETION OF HOUSING [24 CFR 983.155]

Evidence of Completion [24 CFR 983.155] The owner must submit evidence and certify to the PHA, in the form and manner required by the PHA's administrative plan, that development activity or substantial improvement has been completed, and that all such work was completed in accordance with the applicable requirements. The PHA must review the evidence to determine whether the development activity or substantial improvement was completed in accordance with the applicable requirements. In the case of PHA-owned units, the owner must submit evidence and certify to the independent entity, in the form and manner required by the PHA's administrative plan, that development activity or substantial improvement has been completed, and that all such work was completed in accordance with the applicable requirements. The independent entity must review the evidence to determine whether the development activity or substantial improvement was completed in accordance with the applicable requirements.

Owner certification that the owner has complied with labor standards and equal opportunity requirements in development of the housing. At the discretion of the Authority, the AHAP may specify additional documentation that must be submitted by the owner as evidence of housing completion. For example, such documentation may include: A certificate of occupancy or other evidence that the units comply with local requirements (such as code and zoning requirements); and An architect's certification that the housing complies with: HUD housing quality standards; State, local, or other building codes; Zoning; The rehabilitation work write-up (for rehabilitated housing) or the work description (for newly constructed housing); or Any additional design or quality requirements pursuant to the AHAP. The Authority will determine the need for the owner to submit additional documentation as evidence of housing completion on a case-by-case basis depending on the nature of the PBV project. The Authority will specify any additional documentation requirements in the AHAP. PHA Acceptance of Completed Units [24 CFR 983.156(a) and (b)] After the PHA has received all required evidence of completion and the owner's certification that all work was completed in accordance with the applicable requirements, the PHA must inspect to determine if the housing has been completed in accordance with the AHAP, including compliance with housing quality standards and any additional design, architecture, or quality requirements imposed under the AHAP. For PHA-owned units, the independent entity must perform the inspection. The PHA must also determine if the owner has submitted all required evidence of completion. If the work has not been completed in accordance with the Agreement, the PHA must not enter into the HAP contract. If the PHA determines the work has been completed in accordance with the AHAP and all applicable requirements and that the owner has submitted all required evidence of completion, the PHA must:

• For units which will not undergo development activity after HAP contract execution, submit

the HAP contract for execution by the owner and then execute the HAP contract;

• For rehabilitated housing projects for which development activity has commenced prior to

HAP contract execution under 24 CFR 983.157(b), submit the HAP contract for execution by the owner and then execute the HAP contract;

• For development activity after the HAP contract execution, amend the HAP contract rider to

designate the completed units as available for occupancy, or if the owner has completed all development activity as provided in the rider, amend the HAP contract to delete the rider; or

For units that underwent substantial improvement in order to be added to the HAP contract, amend the HAP contract to add the units to the HAP contract. Staged Completion of Contract Units [24 CFR 983.156(c)] Contract units that will not undergo development activity after HAP contract execution may be placed under the HAP contract in stages commencing on different dates. In such a case, the PHA must determine separately for each stage whether the development activity was completed in accordance with the applicable requirements and that the units meet housing quality standards and any additional design, architecture, or quality requirements specified by the PHA. If the first stage is determined compliant, then the PHA must submit the HAP contract for execution by the owner and must execute the HAP contract for PBV rehabilitated housing and newly constructed housing projects. As each subsequent stage is determined compliant, the PHA and owner must amend the HAP contract to add the units to the HAP contract.

Part V: Housing Assistance Payments (Hap) Contract

17-V.A. OVERVIEW

The PHA must enter into a HAP contract with an owner for units that are receiving PBV assistance. The purpose of the HAP contract is to provide housing assistance payments for eligible families leasing PBV units during the term of the HAP contract. With some exceptions, a HAP contract must cover a single project. If multiple projects exist, each project is covered by a separate HAP contract. However, a PHA and owner may agree to place multiple projects, each consisting of a single-family building, under one HAP contract. The HAP contract must be in the form required by HUD.17-V.B. HAP CONTRACT REQUIREMENTS Contract Information [24 CFR 983.203] The HAP contract must specify the following information:

• The total number of contract units by number of bedrooms;
• The project's name, street address, city or county, state and zip code, block and lot number

(if known), and any other information necessary to clearly identify the site and the building;

• The number of contract units in each building, the location of each contract unit, the area of

each contract unit, and the number of bedrooms and bathrooms in each contract unit;

• Services, maintenance, and equipment to be supplied by the owner and included in the rent

to owner;

• Utilities available to the contract units, including a specification of utility services to be paid

by the owner (included in rent) and utility services to be paid by the tenant;

• Features provided to comply with program accessibility requirements of Section 504 of the

Rehabilitation Act of 1973 and implementing regulations at 24 CFR part 8 and the Americans with Disabilities Act, as applicable;

• The HAP contract term;
• The number of units under the increased program cap or excepted from the project cap that

will be set aside for occupancy by families who qualify for such a unit;

• The initial rent to owner for the first 12 months of the HAP contract term; and
• Whether the PHA has elected not to reduce rents below the initial rent to owner.

Execution of the HAP Contract [24 CFR 983.204] Before execution of the HAP contract, the PHA must determine that applicable pre-HAP contract housing quality standards requirements have been met in accordance with 24 CFR 983.103(b) or (c) as applicable. The PHA may not execute the HAP contract for any contract unit that does not meet the pre-HAP contract housing quality standards requirements. For existing housing, the HAP contract must be executed promptly after the PHA selects the owner proposal and the PHA determines that applicable pre-HAP contract housing quality standards requirements have been met. For newly constructed or rehabilitated housing that will not undergo development activity after HAP contract execution, the HAP contract must be executed promptly after the PHA has inspected the completed units and has determined that the units have been completed in accordance with the AHAP, and the owner furnishes all required evidence of completion. For rehabilitated housing that will undergo development activity after HAP contract execution, the HAP contract must be executed and effective promptly after all proposed PBV units are added to the contract at this time, including units that do not comply with HQS or that will undergo development activity.

• Each extension executed must have a term that does not exceed 20 years;

• At no time may the total remaining term of the HAP contract, with extensions, exceed 40

years;

• Before agreeing to an extension, the PHA must determine that the extension is appropriate to

continue providing affordable housing for low-income families or to expand housing opportunities; and

• Each extension must be on the form and subject to the conditions prescribed by HUD at the

time of the extension.

17-V.C. TERMINATION OF THE HAP CONTRACT

The PHA and owner may agree to terminate the HAP contract prior to the end of the term. The owner is required to give notice in accordance 24 CFR 983.206(a) prior to termination, and families must be provided tenant-based assistance and may elect to remain in the project. The HAP contract must provide that the PHA may terminate the contract for insufficient funding, subject to HUD requirements. The PHA has the option of terminating a PBV HAP contract based on "insufficient funding" only if:

• The PHA determines in accordance with HUD requirements that it lacks sufficient HAP

funding (including HAP reserves) to continue to make housing assistance payments for all voucher units currently under a HAP contract;

• The PHA has taken cost-saving measures specified by HUD;
• The PHA notifies HUD of its determination and provides the information required by HUD;

and

• HUD determines that the PHA lacks sufficient funding and notifies the PHA it may terminate

HAP contracts as a result. If the PHA determines that the owner has breached the HAP contract, the PHA may exercise any of its rights or remedies under the HAP contract, including but not limited to contract

termination. The provisions of 24 CFR 983.208 apply for HAP contract breaches involving failure to comply with housing quality standards. For any other contract termination due to breach, 24 CFR 983.206(b) on provision of tenant-based assistance applies. Non-extension by Owner – Notice Requirements [24 CFR 983.206(a)] Not less than one year before the HAP contract terminates, the owner must notify the PHA and assisted tenants of the termination. The notice must be provided in the form prescribed by HUD. The term termination for applicability of this notice requirement means the expiration of the HAP contract, termination of the HAP contract by agreement of PHA and owner, or an owner's refusal to renew the HAP contract. If the owner does not give timely notice, the owner must permit the tenants in assisted units to remain in their units for the required notice period with no increase in the tenant portion of their rent, and with no eviction as a result of the owner's inability to collect an increased tenant portion of rent. An owner and the PHA may agree to renew the terminating contract for a period of time sufficient to give tenants one-year advance notice under such terms as HUD may require. If the amount of the rent to owner for any contract unit, as adjusted, is reduced below the amount of the initial rent to owner, the owner may terminate the HAP contract, upon notice to the PHA no fewer than 90 calendar days prior to the planned termination, and families must be provided tenant-based assistance and may elect to remain in the project. The owner is not required to provide the one-year notice of the termination of the HAP contract to the family and the PHA when terminating the HAP contract due to rent reduction below the initial rent to owner. Assistance [24 CFR 983.206(b)] Unless a termination or expiration without extension occurs due to a determination of insufficient funding or other extraordinary circumstances determined by HUD, upon termination or expiration of the contract, a family living at the property is entitled to receive a tenant-based voucher no fewer than 60 calendar days prior to the planned termination or expiration of the PBV HAP contract. However, the PHA is not required to issue the family a voucher if the PHA has offered the family an alternative housing option (e.g., an assisted unit in another PBV project), and the family chooses to accept the alternative housing option instead of the voucher. Tenant-based assistance would not begin until the owner's required notice period ends. The PHA must provide the family with a voucher and the family must also be given the option by the PHA and owner to remain in their unit with HCV tenant-based assistance subject to the following:

• The unit must comply with housing quality standards;
• The PHA must determine or have determined that the rent for the unit is reasonable;
• The family must pay its required share of the rent and the amount, if any, by which the unit

rent (including the amount allowed for tenant-based utilities) exceeds the applicable payment standard (the limitation at 24 CFR 982.508 regarding maximum family share at initial occupancy does not apply); and

• The owner may not refuse to initially lease a unit in the project to a family that elects to use

their tenant-based assistance to remain in the same project, except where the owner will use the unit for a purpose other than a residential rental unit. The owner may not later terminate the tenancy of such a family, except for the following grounds: - The grounds in 24 CFR 982.310, except paragraphs 24 CFR 982.310(d)(1)(iii) and (iv); - The owner's desire to use the unit for a purpose other than a residential rental unit; and - The owner's desire to renovate the unit, subject to the following:

• The owner must consider whether a reasonable alternative to terminating the lease

exists. If a reasonable alternative exists, the owner must not terminate the lease. The owner must consider the following alternatives: - Completing renovations without the family vacating the unit, if the renovations can be completed in a manner that does not result in life-threatening conditions, does not result in deficiencies under housing quality standards that are not corrected within 30 days, and is mutually agreeable to the owner and the family; and - Temporarily relocating the family to complete the renovations, if the relocation and renovations can be completed within a single calendar month (beginning no sooner than the first day of a month and ending no later than the last day of the same month) and the family can be relocated to a location and in a manner mutually agreeable to the owner and the family;

• If the owner terminates the lease for renovation, the owner must make every

reasonable effort to make available and lease the family another unit within the project that meets the tenant-based voucher program requirements; and

• If no other unit within the project is available for the family to lease during the

renovation period or the family chooses to move from the project during the renovation period, the owner must make every reasonable effort to make available and lease the family a unit within the project upon completion of renovations. The family has the right to remain in the project as long as the units are used for rental housing and are otherwise eligible for HCV assistance. Families that receive a tenant-based voucher at the expiration or termination of the PBV HAP contract are not new admissions to the PHA HCV tenant-based program and are not subject to income eligibility requirements or any other admission requirements. If the family chooses to remain in their unit with tenant-based assistance, the family may do so regardless of whether the family share would initially exceed 40 percent of the family's adjusted monthly income. The voucher issued to the family is the voucher attached to its unit under the expiring or terminating PBV contract. Consequently, if the family vacates the contract unit following the issuance of the tenant-based voucher and prior to the contract termination or expiration date, the PHA must remove the unit from the PBV HAP contract at the time the family vacates the unit. The PBV HAP contract must provide that, if the units continue to be used for rental housing upon termination or expiration without extension of a PBV HAP contract, each assisted family may elect to use its tenant-based assistance to remain in the same project.

Remedies for Housing Quality Standards Deficiencies [24 CFR 983.208] The following is applicable to HAP contracts executed or renewed June 5, 2024, or earlier: The PHA may not make any HAP payment to the owner for a contract unit during any period in which the unit does not comply with housing quality standards. If the PHA determines that a contract does not comply with housing quality standards, the PHA may exercise any of its remedies under the HAP contract, for any or all of the contract units. Available remedies include termination of housing assistance payments, abatement or reduction of housing assistance payments, reduction of contract units, and termination of the HAP contract. PHA Policy The PHA will abate and terminate PBV HAP contracts for noncompliance with housing quality standards in accordance with the policies used in the tenant-based voucher program. These policies are contained in Section 8-II.G., Enforcing Owner Compliance. The following is applicable to HAP contracts executed or renewed June 6, 2024, or later. Enforcement of Housing Quality Standards [24 CFR 983.208(b)] The PHA must vigorously enforce the owner's obligation to maintain contract units in accordance with housing quality standards. If the owner fails to maintain the dwelling unit in accordance with housing quality standards, the PHA must take enforcement action. The unit is in noncompliance with housing quality standards if:

• The PHA or other inspector authorized by the state or local government determines the unit

has housing quality standards deficiencies based upon an inspection;

• The agency or inspector notifies the owner in writing of the unit housing quality standards

deficiencies; and

• The deficiencies are not remedied within the following timeframes:

- For life-threatening deficiencies, the owner must correct the deficiency within 24 hours of notification; - For other deficiencies, the owner must correct the deficiency within 30 calendar days of notification (or any reasonable PHA-approved extension). In the case of a housing quality standards deficiency that the PHA determines is caused by the tenant, any member of the household, or any guest or other person under the tenant's control, other than any damage resulting from ordinary use, the PHA may waive the owner's responsibility to remedy the violation. Housing assistance payments to the owner may not be withheld or abated if the owner responsibility has been waived. However, the PHA may terminate assistance to a family because of a housing quality standards breach beyond damage resulting from ordinary use caused by any member of the household or any guest or other person under the tenant's control, which may result in removing the unit from the HAP contract.

PHA Policy The PHA will waive the owner's responsibility for housing quality standards deficiencies that have been determined to have been caused by the tenant, any member of the household, or any guest or other person under the tenant's control, to the extent the tenant can be held responsible for ensuring that the deficiencies are corrected: the tenant must take all necessary steps permissible under the lease and state and local law to remedy the deficiency. This may include paying the owner for the cost of the necessary repairs in accordance with the lease. In the case of a housing quality standards deficiency that is caused by fire, natural disaster, or similar extraordinary circumstances, the PHA may permit the owner to undertake substantial improvement in accordance with 24 CFR 983.212. However, so long as the contract unit with deficiencies is occupied, the PHA must withhold or abate housing assistance payments and remove units from or terminate the HAP contract as described in this section. In the case of a project that is undergoing development activity after HAP contract execution, the remedies of 24 CFR 983.208(d) do not apply to units designated as unavailable for occupancy during the period of development activity in accordance with the rider. However, in the case of any contract unit with deficiencies that is occupied, the PHA must withhold or abate housing assistance payments and remove units from or terminate the HAP contract as described in this section. Family Obligation [24 CFR 983.208(c)] The family may be held responsible for a breach of housing quality standards caused by any of the following:

• Tenant-paid utilities not in service;
• Failure to provide or maintain appliances owned by the family; and
• Damage to the dwelling unit or premises caused by a household member or guest beyond

ordinary wear and tear. PHA Policy Damages beyond ordinary wear and tear will be considered to be damages which could be assessed against the security deposit under state law or in court practice. If the PHA has waived the owner's responsibility to remedy the violation, the following applies:

• If the housing quality standards breach caused by the family is life-threatening, the family

must take all steps permissible under the lease and state and local law to ensure the deficiency is corrected within 24 hours of notification.

• For other family-caused deficiencies, the family must take all steps permissible under the

lease and state and local law to ensure the deficiency is corrected within 30 calendar days of notification (or any PHA-approved extension). If the family has caused a breach of the housing quality standards, the PHA must take prompt and vigorous action to enforce the family obligations. The PHA may terminate assistance for the family in accordance with 24 CFR 982.552.

PHA Remedies [24 CFR 983.208(d)] The remedies listed below apply when housing quality standards deficiencies are identified as the result of an inspection other than a pre-selection, initial, or turnover inspection. The PHA must identify in its administrative plan the conditions under which it will withhold HAP and the conditions under which it will abate HAP or terminate the HAP contract for units other than the unit with housing quality standards deficiencies. PHA Policy The owner and the family will be notified in writing of the results of all inspections. When an inspection identifies housing quality standards failures, the PHA will determine (1) whether or not the failure is a life-threatening condition and (2) whether the family or owner is responsible. The PHA will not withhold assistance payments upon notification to the owner of the deficiencies. When life-threatening conditions are identified, the PHA will immediately notify both parties by telephone or email. The notice will specify who is responsible for correcting the violation. The corrective actions must be taken within 24 hours of the PHA's notice. When failures that are not life-threatening are identified, the PHA will send the owner and the family a written notification of the inspection results within five business days of the inspection. The written notice will specify who is responsible for correcting the violation, and the time frame within which the failure must be corrected. Generally, not more than 30 days will be allowed for the correction. If the owner is responsible for correcting the deficiency, the notice of inspection results will inform the owner that if life-threatening conditions are not corrected within 24 hours, and non-life-threatening conditions are not corrected within the specified time frame (or any PHA-approved extension), the owner's HAP will be abated. Likewise, if the family is responsible for correcting the deficiency, the notice will inform the family that if corrections are not made within the specified time frame (or any PHA- approved extension, if applicable) the family's assistance will be terminated in accordance with PHA policy (see Chapter 12).

HAP Withholding [24 CFR 983.208(d)(1) A PHA may withhold assistance payments for units that have housing quality standards deficiencies once the PHA has notified the owner in writing of the deficiencies. The PHA's administrative plan must identify the conditions under which the PHA will withhold HAP. In this case, if the unit is brought into compliance during the applicable cure period, the PHA resumes assistance payments and provides assistance payments to cover the time period for which the payments were withheld. PHA Policy The PHA will not withhold assistance payments upon notification to the owner of the deficiencies. HAP Abatement [24 CFR 983.208(d)(2)] The PHA must abate the HAP, including amounts that had been withheld, if the owner fails to make the repairs within the applicable cure period. The PHA may choose to abate payments for all units covered by the HAP contract due to a contract unit's noncompliance with the housing quality standards, even if some of the contract units continue to meet housing quality standards. In this case, the PHA must notify the family and the owner that it is abating payments and, if the unit does not meet housing quality standards within 60 days (or a reasonable longer period established by the PHA), the PHA will either terminate the HAP contract or remove the unit with deficiencies from the HAP contract, and any family residing in a unit that does not comply with housing quality standards will have to move if the family wishes to receive continued assistance. The owner may not terminate the tenancy of any family due to the withholding or abatement of assistance. PHA Policy The PHA will make all HAP abatements effective the first of the month following the expiration of the PHA-specified correction period (including any extension). The PHA will abate payments only for those contract units that do not meet housing quality standards. The PHA will inspect abated units within five business days of the owner's notification that the work has been completed. Payment will resume effective on the day the unit passes inspection. During any abatement period the family continues to be responsible for its share of the rent.

Failure to Make Repairs If an owner fails to make required repairs within 60 days (or a reasonable longer period established by the PHA) of the notice of abatement, the PHA must either remove the unit from the HAP contract or terminate the HAP contract in its entirety. The PHA must issue the family whose unit will be removed or all families residing in contract units, if the PHA is terminating the HAP contract, a tenant-based voucher to move at least 30 days prior to the removal of the unit from the HAP contract or termination of the HAP contract. A family may elect to remain in the project if the project contains a unit that meets the requirements of that section, with priority given to families who will remain in the same unit if there are insufficient units available to accommodate all families that wish to remain. The PHA must give any family residing in a unit that is either removed from the HAP contract or for which the HAP contract is terminated due to a failure to correct housing quality standards deficiencies at least 90 days or a longer period as the PHA determines is reasonably necessary following the termination of the HAP contract or removal of the unit from the HAP contract to lease a unit with tenant-based assistance. PHA Policy The PHA will issue a family whose HAP contract is being terminated due to an owner failing to make required repairs within the required time frame a voucher no later than 30 days prior to the termination of the HAP contract. The initial term of the voucher will be 120 calendar days. No briefing is required for these families. In order to receive tenant-based assistance under the HCV program, the family must submit a Request for Tenancy Approval and proposed lease within the 120-day period, unless the PHA grants an extension. The PHA will follow the policies set forth in Chapter 5 on voucher extension and expiration. Offer of Public Housing [24 CFR 983.208(d)(6)(ii)] If the family is unable to lease a new unit within the term of the voucher, and the PHA owns or operates public housing, the PHA must offer, and, if accepted, provide the family a selection preference for an appropriate-size public housing unit that first becomes available for occupancy after the time period expires.

Relocation Assistance [24 CFR 983.208(d)(6)(iii)] PHAs may assist families relocating due to the HAP contract being terminated as a result of the owner failing to make required repairs within the required time frame in finding a new unit, including using up to two months of the withheld and abated assistance payments for costs directly associated with relocating to a new unit, including security deposits, temporary housing costs, or other reasonable moving costs as determined by the PHA based on their locality. If the PHA uses withheld and abated payments to assist with relocation costs, the PHA must provide security deposit assistance to the family as necessary. The PHA must assist families with disabilities with locating available accessible units in accordance with 24 CFR 8.28 (a)(3). If the family receives security deposit assistance from the PHA for the new unit, the PHA may require the family to remit the security deposit returned by the owner of the new unit as such time that the lease is terminated, up to the amount of security deposit provided by the PHA for that unit.

17-V.D. AMENDMENTS TO THE HAP CONTRACT TO ADD OR SUBSTITUTE UNITS

[24 CFR 983.207] At the PHA's discretion, the PHA and owner may execute an amendment to the HAP contract to substitute a different unit with the same number of bedrooms in the same project for a previously covered contract unit or to add additional contract units to the existing HAP contract without a new proposal selection. The proposed substituted or added units may be vacant or occupied (subject to the requirements of 24 CFR 983.207(c) described below). Before any such substitution or addition can take place:

• The units must comply with housing quality standards;
• The rent to owner must be reasonable; and
• One of the following conditions must apply:

- The units existed at the time of HAP contract execution; or - In the case of a project completed in stages, the units existed at the time of PHA acceptance of the last completed units; or - A unit, office space, or common area within the interior of a building containing contract units existed at the time described above, as applicable, and is reconfigured without impacting the building envelope, subject to 24 CFR 983.207(d), into one or more units to be added or substituted.

The PHA must describe in the administrative plan the circumstances under which it will add or substitute contract units, and how those circumstances support the goals of the PBV program.

• The family occupying the unit must be eligible for assistance;
• The unit must be the appropriate for the size of the family occupying the unit under the

PHA's subsidy standards;

• The family must be selected from the waiting list in accordance with applicable selection

policies; and

• The unit may be occupied by a family who was assisted with a tenant-based voucher

immediately prior to the unit being placed on the PBV HAP contract. The tenant-based HAP contract for the unit must terminate before the unit may be placed under the PBV HAP contract. The family occupying the unit is not a new admission to the voucher program. - If the family is in the initial term of the tenant-based lease, the family agreed to mutually terminate the tenant-based lease with the owner and enter into a PBV lease. If the initial term of the tenant-based lease has passed or the end of that term coincides with the time at which the unit will be placed on the PBV HAP contract, upon the owner's decision not to renew the tenant-based lease or to terminate the tenant-based lease in accordance with 24 CFR 982.308 or 982.310, respectively, the family agreed to relinquish the tenant-based voucher and enter into a PBV lease.

17-V.E. HAP CONTRACT YEAR, ANNIVERSARY AND EXPIRATION DATES [24

CFR 983.207(b)(2) and (g) and 983.302(e)] The HAP contract year is the period of 12 calendar months preceding each annual anniversary of the HAP contract during the HAP contract term. The initial contract year is calculated from the first day of the first calendar month of the HAP contract term. The annual anniversary of the HAP contract is the first day of the first calendar month after the end of the preceding contract year.

There is a single annual anniversary and expiration date for all units under a particular HAP contract, even in cases where contract units are placed under the HAP contract in stages (on different dates) or units are added by amendment. The anniversary and expiration dates for all units coincide with the dates for the contract units that were originally placed under contract.

17-V.F. OWNER RESPONSIBILITIES UNDER THE HAP CONTRACT

[24 CFR 983.210] When the owner executes the HAP contract s/he certifies that at such execution and at all times during the term of the HAP contract:

• The owner is maintaining the premises and contract units in accordance with housing quality

standards;

• The owner is providing all services, maintenance, equipment and utilities as agreed to under

the HAP contract and the leases;

• Each contract unit for which the owner is receiving HAP, is leased to an eligible family

referred by the PHA or selected from the owner-maintained waiting list, and the lease is in accordance with the HAP contract and HUD requirements;

• To the best of the owner's knowledge the family resides in the contract unit for which the

owner is receiving HAP, and the unit is the family's only residence;

• The owner (including a principal or other interested party) is not the spouse, parent, child,

grandparent, grandchild, sister, or brother of any member of a family residing in a contract unit (unless needed as a reasonable accommodation);

• The amount of the HAP the owner is receiving is correct under the HAP contract;
• The rent for contract units does not exceed rents charged by the owner for comparable

unassisted units;

• Except for HAP and tenant rent, the owner has not received and will not receive any other

payment or consideration for rental of the contract unit;

• The family does not own or have any interest in the contract unit (does not apply to family's

membership in a cooperative); and

• Repair work on the project selected as an existing project that is performed after HAP

execution within such post-execution period as specified by HUD may constitute development activity, and if determined to be development activity, the repair work undertaken shall be in compliance with Davis-Bacon wage requirements.

Part Vi: Selection Of Pbv Program Participants

17-VI.A. OVERVIEW

Many of the provisions of the tenant-based voucher regulations [24 CFR 982] also apply to the PBV program. This includes requirements related to determining eligibility and selecting applicants from the waiting list. Even with these similarities, there are requirements that are unique to the PBV program. This part describes the requirements and policies related to eligibility and admission to the PBV program.

17-VI.B. ELIGIBILITY FOR PBV ASSISTANCE [24 CFR 983.251(a) and (b)]

The PHA may select families for the PBV program from those who are participants in the PHA's tenant-based voucher program and from those who have applied for admission to the voucher program. For voucher participants, eligibility was determined at original admission to the voucher program and does not need to be redetermined at the commencement of PBV assistance. For all others, eligibility for admission must be determined at the commencement of PBV assistance using information received and verified by the PHA within a period of 60 days before commencement of PBV assistance. For all families, the PHA must determine the total tenant payment for the family is less than the gross rent, such that the unit will be eligible for a monthly HAP. Applicants for PBV assistance must meet the same eligibility requirements as applicants for the tenant-based voucher program. Applicants must qualify as a family as defined by HUD and the PHA, meet asset limitation requirements, have income at or below HUD-specified income limits, and qualify on the basis of citizenship or the eligible immigration status of family members [24 CFR 982.201(a) and 24 CFR 983.2(a)]. In addition, an applicant family must provide social security information for family members [24 CFR 5.216 and 5.218] and consent to the PHA's collection and use of family information regarding income, expenses, and family composition [24 CFR 5.230]. The PHA may also not approve a tenancy if the owner (including a principal or other interested party) of the unit is the parent, child, grandparent, grandchild, sister, or brother of any member of the family, unless needed as a reasonable accommodation. An applicant family must also meet HUD requirements related to current or past criminal activity.

In-Place Families [24 CFR 983.251(b)] An eligible family residing in a proposed PBV contract unit on the date the proposal is selected by the PHA is considered an "in-place family." These families are afforded protection from displacement under the PBV rule. If a unit to be placed under contract (either an existing unit or a unit requiring rehabilitation) is occupied by an eligible family on the date the proposal is selected, the in-place family must be placed on the PHA's waiting list. Once the family's continued eligibility is determined (the PHA may deny assistance to an in-place family for the grounds specified in 24 CFR 982.552 and 982.553), the family must be given an absolute selection preference and the PHA must refer these families to the project owner for an appropriately sized PBV unit in the project. Admission of eligible in-place families is not subject to income targeting requirements. During the initial term of the lease under the tenant-based tenancy, an in-place tenant-based voucher family may agree, but is not required, to mutually terminate the lease with the owner and enter into a lease and tenancy under the PBV program. If the family chooses to continue the tenant-based assisted tenancy, the unit may not be added to the PBV HAP contract. The owner may not terminate the lease for other good cause during the initial term unless the owner is terminating the tenancy because of something the family did or failed to do in accordance with 24 CFR 982.310(d)(2). The owner is expressly prohibited from terminating the tenancy during the initial term of the lease based on the family's failure to accept the offer of a new lease or revision, or for a business or economic reason. If, after the initial term, the owner chooses not to renew the lease or terminates the lease for other good cause (as defined in 24 CFR 982.310(d)) to end the tenant-based assisted tenancy, the family would be required to move with continued tenant-based assistance or relinquish the tenant-based voucher and enter into a new lease to receive PBV assistance in order to remain in the unit.

17-VI.C. ORGANIZATION OF THE WAITING LIST [24 CFR 983.251(c)]

Applicants who will occupy units with PBV assistance must be selected from the waiting list for the PBV program. The PHA or owner (as applicable) may establish selection criteria or preferences for occupancy of particular PBV units. The PHA may place families referred by the PBV owner on its PBV waiting list. The PHA must establish in the administrative plan the options it will use to structure the PBV waiting list. The PHA may:

• Use a separate, central, waiting list comprised of more than one or all PBV projects;
• Use the same waiting list for both tenant-based and some or all PBV projects;
• Use a separate waiting list for PBV units in individual projects or buildings (or for sets of

such units) (which may be used in combination with either of the above options and may be maintained by the owner); or

• Merge the PBV waiting list with a waiting list for other assisted housing programs offered by

the PHA. If the PHA chooses to offer a separate waiting list for PBV assistance, the PHA must offer to place applicants who are listed on the tenant-based waiting list on the waiting list for PBV assistance. The PHA must specify the name of the PBV projects in its administrative plan.

17-VI.D. OWNER-MAINTAINED WAITING LISTS [24 CFR 983.251(c)(7)]

When the PHA uses separate waiting lists for individual projects or buildings, the PHA may establish in the administrative plan that owners will maintain the waiting lists. All HCV waiting list administration requirements that apply to the PBV program also apply to owner-maintained waiting lists [24 CFR part 982, subpart E, other than 24 CFR 982.201(e), 982.202(b)(2), and 982.204(d)]. Under an owner-maintained waiting list, the owner is responsible for carrying out responsibilities including, but not limited to:

• Processing changes in applicant information;
• Removing an applicant's name from the waiting list;
• Opening and closing the waiting list;

- If the owner-maintained waiting list is open and additional applicants are needed to fill vacant units, the owner must give public notice in accordance with the requirements of 24 CFR 982.206 and the owner waiting list policy.

• Maintaining complete and accurate records as described in 24 CFR 982.158; and
• Giving the PHA, HUD, and the Comptroller General full and free access to its offices and

records concerning waiting list management, as described in 24 CFR 982.158(c). Applicants already on the PHA's waiting list (including the tenant-based waiting list) must be permitted to place their names on the project's waiting lists. Applicants may apply directly at the project, or the applicant may request that the PHA refer the applicant to the owner for placement on the project's waiting list. The PHA must disclose to the applicant all the PBV projects available to the applicant, including the projects' contact information and other basic information about the project.

Owner Waiting List Policy [24 CFR 983.251(c)(7)(i)] The owner must develop and submit to the PHA a written owner waiting list policy that must include:

• Policies and procedures concerning waiting list management and selection of applicants from

the project's waiting list, including any admission preferences;

• Procedures for removing applicant names from the waiting list; and
• Procedures for closing and reopening the waiting list.

The owner must receive approval from the PHA in accordance with the process established in the PHA's administrative plan, and the PHA must include the owner's waiting list policy in the PHA's administrative plan.

The PHA will allow the owner to make preliminary eligibility determinations for purposes of placing the family on the waiting list. The owner must review each completed application received and make a preliminary assessment of the family's eligibility. Applicants for whom the waiting list is open must be placed on the waiting list unless the owner determines the family to be ineligible. If the owner determines from the information provided that a family is ineligible, the family will not be placed on the waiting list. The owner is responsible for notifying the family and the PHA of the owner's determination not to place the applicant on the waiting list. In such a case, the owner is responsible for providing notice in accordance with 24 CFR 982.554(a). The owner must give the applicant prompt notice of a decision denying assistance to the applicant. The notice must contain a brief statement of the reasons for the owner decision and must also state that the applicant may request an informal review by the PHA.

PHA Oversight [24 CFR 983.251(c)(7)(x)] The PHA is responsible for oversight of owner-maintained waiting lists to ensure that they are administered properly and in accordance with program requirements, including but not limited to nondiscrimination and equal opportunity requirements under 24 CFR 5.105(a). The PHA must identify in the administrative plan the oversight procedures the PHA will use to ensure these requirements are met.

The PHA will review owner waiting list and waiting list procedures annually. The owner must maintain an electronic waiting list and provide the PHA electronic records upon request. The PHA will review the owner's waiting list policy to ensure the following: No changes were made to the owner's waiting list policy without prior PHA approval; Applicants were selected from the waiting list in the proper order, recognizing applicable preferences; If applicable, when preferences were applied, they were properly documented; If the owner opens the waiting list, the owner complied with requirements of 24 CFR 982.206; The owner's waiting list complies with all equal opportunity requirements listed under 24 CFR 5.105(a); and Families in need of vacant accessible units were identified on the waiting list (as applicable). The PHA will communicate any deficiencies found during the waiting list review to the owner in writing via email within 10 business days after the PHA completes its review. The owner must provide the PHA with a written response detailing how deficiencies were remedied within 30 calendar days of the PHA's email notification. By signing the HAP contract, the owner certifies that at all times during the term of the HAP contract, each contract unit for which the owner is receiving housing assistance payments is leased to an eligible family selected from the owner-maintained waiting list. Serious noncompliance identified by the PHA may result in the owner losing the ability to maintain the waiting list. If the PHA determines that the owner has breached the HAP contract, the PHA may exercise any of its rights or remedies under the HAP contract, including but not limited to contract termination.

17-VI.D. SELECTION FROM THE WAITING LIST [24 CFR 983.251(c)]

Applicants who will occupy units with PBV assistance must be selected from the PHA's waiting list. The PHA may establish selection criteria or preferences for occupancy of particular PBV units. The PHA may place families referred by the PBV owner on its PBV waiting list.

Income Targeting [24 CFR 983.251(c)(6)] At least 75 percent of the families admitted to the PHA's tenant-based and project-based voucher programs during the PHA fiscal year from the waiting list (including owner-maintained PBV waiting lists) must be extremely low-income families. The income targeting requirement applies to the total of admissions to both programs. Units with Accessibility Features [24 CFR 983.251(c)(9)] Families who require particular accessibility features for persons with disabilities must be selected first to occupy PBV units with such accessibility features. The PHA must have some mechanism for referring to accessible PBV units a family that includes a person with a mobility or sensory impairment.

17-VI.F. OFFER OF PBV ASSISTANCE OR OWNER'S REJECTION

Refusal of Offer [24 CFR 983.251(e)] If a family refuses the PHA's offer of PBV assistance or the owner rejects a family for admission, the family's position on the PHA waiting list for tenant-based assistance is not affected regardless of the type of PBV waiting list used by the PHA. The impact (of a family's rejection of the offer or the owner's rejection of the family) on a family's position on the PBV waiting list will be determined as follows:

• If a central PBV waiting list is used, the PHA's administrative plan must address the number

of offers a family may reject without good cause before the family is removed from the PBV waiting list and whether the owner's rejection will impact the family's place on the PBV waiting list.

• If a project-specific PBV waiting list is used, the family's name is removed from the

project's waiting list connected to the family's rejection of the offer without good cause or the owner's rejection of the family. The family's position on any other project-specific PBV waiting list is not affected.

• The PHA must define good cause in its administrative plan. The PHA's definition of good

cause must include, at minimum, that: - The family determines the unit is not accessible to a household member with a disability or otherwise does not meet the member's disability-related needs; - The unit has housing quality standards deficiencies; - The family is unable to accept the offer due to circumstances beyond the family's control (such as hospitalization, temporary economic hardship, or natural disaster); and - The family determines the unit presents a health or safety risk to a household member who is or has been a victim of domestic violence, dating violence, sexual assault, or stalking.

The PHA must not take any of the following actions against a family who has applied for, received, or refused an offer of PBV assistance:

• Refuse to list the applicant on the waiting list for tenant-based voucher assistance;

- The PHA (or owner in the case of owner-maintained waiting lists) is not required to open a closed waiting list to place the family on that waiting list.

• Deny any admission preference for which the applicant is currently qualified;
• Change the applicant's place on the waiting list based on preference, date, and time of

application, or other factors affecting selection from the waiting list;

• Remove the applicant from the tenant-based voucher waiting list.

Acceptance of Offer [24 CFR 983.252] Family Briefing When a family accepts an offer for PBV assistance, the PHA must give the family an oral briefing. The briefing must include information on how the program works, the responsibilities of the family and owner. In addition to the oral briefing, the PHA must provide a briefing packet that contains the following information:

• How the PHA determines the total tenant payment for a family;
• The family obligations under the program;
• Information on federal, state, and local equal opportunity laws, the contact information for

the Section 504 coordinator, a copy of the housing discrimination complaint form, and information on how to request a reasonable accommodation or modification under Section 504, the Fair Housing Act, and the Americans with Disabilities Act;

• PHA subsidy standards, including when the PHA will consider granting exceptions to the

standards, and when exceptions are required as a reasonable accommodation for a person with disabilities under Section 504, the Fair Housing Act, or the Americans with Disabilities Act; and

• The family's right to move.

The PHA and family must sign the statement of family responsibility. Persons with Disabilities If an applicant family's head or spouse is disabled, the PHA must assure effective communication, in accordance with 24 CFR 8.6 and 28 CFR Part 35, subpart E, and must provide information on the reasonable accommodation process in conducting the oral briefing and in providing the written information packet. This may include making alternative formats available (see Chapter 2). In addition, the PHA must have a mechanism for referring a family that includes a member with a mobility impairment to an appropriate accessible PBV unit.

Persons with Limited English Proficiency [24 CFR 983.252(d)]

The PHA must take reasonable steps to ensure meaningful access by persons with limited English proficiency in accordance with Title VI of the Civil Rights Act of 1964, HUD's implementing regulation at 24 CFR Part 1, Executive Order 13166 (see Chapter 2), and HUD's Final Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons (72 FR 2732) or successor authority.

17-VI.G. LEASING OF CONTRACT UNITS [24 CFR 983.252]

The owner is responsible for developing written tenant selection procedures that are consistent with the purpose of improving housing opportunities for very low-income families and reasonably related to program eligibility and an applicant's ability to fulfill their obligations under the lease. An owner must promptly notify in writing any rejected applicant of the grounds for any rejection [24 CFR 983.253(a)(2) and (a)(3)]. The owner must provide a copy of the rejection notice to the PHA. During the term of the HAP contract, the owner must lease contract units to eligible families that are selected from the waiting list for the PBV program. The contract unit leased to the family must be the appropriate size unit for the size of the family, based on the PHA's subsidy standards. Filling Vacancies [24 CFR 983.254(a)] The PHA and the owner must make reasonable, good-faith efforts to minimize the likelihood and length of any vacancy in a contract unit. However, contract units in a rehabilitated housing project undergoing development activity after HAP contract execution that are not available for occupancy are not subject to this requirement. If an owner-maintained waiting list is used, the owner must promptly notify the PHA of any vacancy or expected vacancy in a contract unit and refer the family to the PHA for final eligibility determination. The PHA must make every reasonable effort to make such final eligibility determination within 30 calendar days. If a PHA-maintained waiting list is used, the owner must promptly notify the PHA of any vacancy or expected vacancy in a contract unit. After receiving such notice, the PHA must make every reasonable effort to promptly refer a sufficient number of families for the owner to fill such vacancies within 30 calendar days.

For units where the waiting list is owner-maintained, the owner must notify the PHA in writing via email within five (5) business days of learning about any vacancy or expected vacancy. The owner is responsible for notifying the family of their selection from the waiting list. The PHA will make every reasonable effort to notify the owner in writing via email of the PHA's eligibility determination within thirty (30) calendar days of receiving such notice from the owner. If the family is determined eligible, the PHA will notify the family and refer them back to the owner for a suitability screening. If the owner rejects the family after conducting a suitability screening, the owner must provide a copy of the rejection notice to the PHA. The owner may not offer a unit to a family until the PHA determines that the family is eligible for the program and has given the owner written confirmation.

Reduction in HAP Contract Units Due to Vacancies [24 CFR 983.254(b)] If any contract units have been vacant for 120 or more days since owner notice of the vacancy, the PHA may give notice to the owner amending the HAP contract to reduce the number of contract units by subtracting the number of contract units (according to the bedroom size) that have been vacant for this period.

17-VI.H. TENANT SCREENING [24 CFR 983.255]

PHA Option The PHA is not responsible or liable to the owner or any other person for the family's behavior or suitability for tenancy. However, the PHA may opt to screen applicants for family behavior or suitability for tenancy and may deny applicants based on such screening.

the PHA policy on providing information to owners, and the PHA must give the same types of information to all owners. The PHA may not disclose to the owner any confidential information provided in response to a request for documentation of domestic violence, dating violence, sexual assault, stalking, or human trafficking, except at the written request or with the written consent of the individual providing the documentation [see 24 CFR 5.2007(a)(4)].

• Payment of rent and utility bills;
• Caring for a unit and premises;
• Respecting the rights of other residents to the peaceful enjoyment of their housing;
• Drug-related criminal activity or other criminal activity that is a threat to the health, safety, or

property of others; and

• Compliance with other essential conditions of tenancy.

Part Vii: Occupancy

17-VII.A. OVERVIEW

After an applicant has been selected from the waiting list, determined eligible by the PHA, referred to an owner and determined suitable by the owner, the family will sign the lease and occupancy of the unit will begin.

17-VII.B. LEASE [24 CFR 983.256]

The tenant must have legal capacity to enter a lease under state and local law. Legal capacity means that the tenant is bound by the terms of the lease and may enforce the terms of the lease against the owner [24 CFR 983.256(a)]. Form of Lease [24 CFR 983.256(b)] The tenant and the owner must enter into a written lease agreement that is signed by both parties. If an owner uses a standard lease form for rental units to unassisted tenants in the locality or premises, the same lease must be used for assisted tenants, except that the lease must include a HUD-required tenancy addendum. The tenancy addendum must include, word-for-word, all provisions required by HUD. If the owner does not use a standard lease form for rental to unassisted tenants, the owner may use another form of lease, such as a PHA model lease. The PHA may review the owner's lease form to determine if the lease complies with state and local law. If the PHA determines that the lease does not comply with state or local law, the PHA may decline to approve the tenancy.

• The names of the owner and the tenant;
• The unit rented (address, apartment number, if any, and any other information needed to

identify the leased contract unit);

• The term of the lease (initial term and any provision for renewal);
• The amount of the tenant rent to owner, which is subject to change during the term of the

lease in accordance with HUD requirements;

• A specification of the services, maintenance, equipment, and utilities that will be provide by

the owner; and

• The amount of any charges for food, furniture, or supportive services.

Tenancy Addendum [24 CFR 983.256(d)] The tenancy addendum in the lease must state:

• The program tenancy requirements;
• The composition of the household as approved by the PHA (the names of family members

and any PHA-approved live-in aide);

• All provisions in the HUD-required tenancy addendum must be included in the lease. The

terms of the tenancy addendum prevail over other provisions of the lease. Initial Term and Lease Renewal [24 CFR 983.256(f)] The initial lease term must be for at least one year. The lease must provide for automatic renewal after the initial term of the lease in either successive definitive terms (e.g. month-to-month or year-to-year) or an automatic indefinite extension of the lease term. For automatic indefinite extension of the lease term, the lease terminates if any of the following occur:

• The owner terminates the lease for good cause
• The tenant terminates the lease
• The owner and tenant agree to terminate the lease
• The PHA terminates the HAP contract
• The PHA terminates assistance for the family

Changes in the Lease [24 CFR 983.256(e)] If the tenant and owner agree to any change in the lease, the change must be in writing, and the owner must immediately give the PHA a copy of all changes. The owner must notify the PHA in advance of any proposed change in the lease regarding the allocation of tenant and owner responsibilities for utilities. Such changes may only be made if approved by the PHA and in accordance with the terms of the lease relating to its amendment. The PHA must redetermine reasonable rent, in accordance with program requirements, based on any change in the allocation of the responsibility for utilities between the owner and the tenant. The redetermined reasonable rent will be used in calculation of the rent to owner from the effective date of the change. Owner Termination of Tenancy [24 CFR 983.257] With two exceptions, the owner of a PBV unit may terminate tenancy for the same reasons an owner may in the tenant-based voucher program (see Section 12-III.B. and 24 CFR 982.310). In the PBV program, terminating tenancy for "good cause" does not include doing so for a business or economic reason, or a desire to use the unit for personal or family use or other non-residential purpose. The regulations at 24 CFR 5.858 through 5.861 on eviction for drug and alcohol abuse and 24 CFR Part 5, subpart L (Protection for Victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking) apply to the PBV program. In addition, the owner may terminate the tenancy in accordance with the requirements related to lease terminations for development activity on units under a HAP contract and for substantial improvement to units under a HAP contract.

Tenant Absence from the Unit [24 CFR 983.256(g) and 982.312(a)] The lease may specify a maximum period of family absence from the unit that may be shorter than the maximum period permitted by PHA policy. According to program requirements, the family's assistance must be terminated if they are absent from the unit for more than 180 consecutive days. PHA termination of assistance actions due to family absence from the unit are subject to 24 CFR 981.312, except that the unit is not terminated from the HAP contract if the family is absent for longer than the maximum period permitted. Continuation of Housing Assistance Payments [24 CFR 982.258] Housing assistance payments shall continue until the tenant rent equals the rent to owner. The cessation of housing assistance payments at such point will not affect the family's other rights under its lease, nor will such cessation preclude the resumption of payments as a result of later changes in income, rents, or other relevant circumstances if such changes occur within 180 days following the date of the last housing assistance payment by the PHA. After the 180-day period, the unit shall be removed from the HAP contract pursuant to 24 CFR 983.211.

17-VII.C. MOVES

Overcrowded, Under-Occupied, and Accessible Units [24 CFR 983.260] If the PHA determines that a family is occupying a wrong size unit, based on the PHA's subsidy standards, or a unit with accessibility features that the family does not require, and the unit is

needed by a family that does require the features, the PHA must promptly notify the family and the owner of this determination, and within 60 days of the determination, the PHA must offer the family the opportunity to receive continued housing assistance in another unit.

If the PHA offers the family another form of assistance that is not a tenant-based voucher, the PHA must terminate the housing assistance payments for the wrong-sized or accessible unit and remove the unit from the HAP contract when:

• The PHA has offered PBV assistance or other project-based assistance in an appropriately

sized unit, and the family does not accept the offer, does not move out of the PBV unit within a reasonable time as determined by the PHA (not to exceed 90 days); or

• The PHA has offered other comparable tenant-based rental assistance, the family either

accepts or does not accept the offer but does not move out of the PBV unit within a reasonable time as determined by the PHA (not to exceed 90 days). In either of the above situations, the family may request, and the PHA may grant, one extension not to exceed up to an additional 90 days to accommodate the family's efforts to locate affordable, safe, and geographically proximate replacement housing.

The PHA must terminate the housing assistance payments for the wrong-sized or accessible unit and remove the unit from the HAP contract when the PHA has offered PBV assistance or other project-based assistance in an appropriately sized unit, and the family accepts the offer but does not move out of the PBV unit within a reasonable time as determined by the PHA (not to exceed 90 days). No extensions may be granted in this case. The PHA may reinstate a removed unit to the HAP contract after the family vacates the property, in accordance with 24 CFR 983.207(b).

When the victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking has lived in the unit for less than one year, the Authority will provide several options for continued assistance. The Authority will first try to transfer the participant to another PBV unit in the same development or transfer to a different development where the Authority has PBV units. The Authority will expedite the administrative processes in this case in an effort to conduct the transfer as quickly as possible. If no units are available for an internal transfer, or if there is reasonable cause to believe that such a transfer would put the victim in jeopardy, the participant may receive continued assistance through an external transfer to either tenant-based rental assistance (HCV) or assistance in the Authority's public housing program. Such a decision will be made by the Authority based on the availability of tenant-based vouchers and/or vacancies in public housing units. Such families must be selected from the waiting list for the applicable program. The Authority has adopted a waiting list preference for existing Authority families participating in any of the Authority rental assistance programs for victims of domestic violence, dating violence, sexual assault, stalking, and human trafficking in both its HCV and public housing programs in order to expedite this process. See Section 4-III.C. of this administrative plan. If a victim wishes to move after a year of occupancy in the unit, but no tenant-based vouchers are available, the Authority will offer the participant an internal transfer to another PBV unit in the same development or a transfer to a different development where the Authority has PBV units. The Authority will expedite the administrative processes in this case in an effort to conduct the transfer as quickly as possible. If no units are available for an internal transfer, or if there is reasonable cause to believe that such a transfer would put the victim in jeopardy, the participant may receive continued assistance through an external transfer to the Authority's public housing program for which they are required to apply. The Authority has adopted a waiting list preference for existing Authority families participating in any of the Authority rental assistance programs for victims of domestic violence, dating violence, sexual assault, stalking, and human trafficking as part of the public housing ACOP in order to expedite this process.

Part Viii: Determining Rent To Owner

17-VIII.A. OVERVIEW [24 CFR 983.301(a)]

The amount of the initial rent to an owner of units receiving PBV assistance is established at the beginning of the HAP contract term. Although for rehabilitated or newly constructed housing, the AHAP states the estimated amount of the initial rent to owner, the actual amount of the initial rent to owner is established at the beginning of the HAP contract term.

17-VIII.B. AMOUNT OF RENT TO OWNER [24 CFR 983.301 (b)]

Except for certain tax credit units (discussed below), the rent to owner must not exceed the lowest of the following amounts:

• An amount determined by the PHA, not to exceed 110 percent of the applicable fair market

rent (or any HUD-approved exception payment standard) for the unit bedroom size minus any utility allowance;

• The reasonable rent; or
• The rent requested by the owner.

Rent to Owner for Certain Tax Credit Units [24 CFR 983.301(c)] For certain tax credit units, the rent limits are determined differently than for other PBV units. Tax credit units that do not meet the criteria below will have their rents determined by the PHA pursuant to 24 CFR 983.301(b) as stated above. Rents are set differently in contract units that meet all of the following criteria:

• The contract unit receives a low-income housing tax credit under the Internal Revenue Code

of 1986;

• The contract unit is not located in a qualified census tract;
• There are comparable tax credit units of the same bedroom size as the contract unit in the

same project, and the comparable tax credit units do not have any form of rental assistance other than the tax credit; and

• The tax credit rent exceeds 110 percent of the fair market rent or any approved exception

payment standard as determined in 24 CFR 983.301(b); For contract units that meet all of these criteria, the rent to owner must not exceed the lowest of:

• An amount determined by the PHA in accordance with the administrative plan, not to exceed

the tax credit rent minus any utility allowance;

• The reasonable rent; or
• The rent requested by the owner.

The tax credit rent is the rent charged for comparable units of the same bedroom size in the building that also receive the low-income housing tax credit but do not have any additional rental assistance (e.g., additional assistance such as tenant-based voucher assistance). Use of FMRs, Exception Payment Standards, and Utility Allowances [24 CFR 983.301(f)] When determining the initial rent to owner, the PHA must use the most recently published FMR in effect and the utility allowance schedule in effect at execution of the HAP contract. When redetermining the rent to owner, the PHA must use the most recently published FMR and the utility allowance schedule in effect at the time of redetermination. At its discretion, the PHA may for initial rent, use the amounts in effect at any time during the 30-day period immediately before the beginning date of the HAP contract, or for redeterminations of rent, the 30-day period immediately before the redetermination date. For PBV projects that are not located in a designated SAFMR area or located in a ZIP code where the PHA has opted in to SAFMRs, any exception payment standard amount under the tenant-based voucher program also applies to the project-based voucher program. HUD will not approve a different exception payment standard amount for use in the PBV program. For PBV projects that are located in a designated SAFMR area or located in a ZIP code where the PHA has opted in to SAFMRs, an exception payment standard amount under the tenant- based voucher program applies when setting rents under 24 CFR 983.301(b)(1) for PBV units and 983.301(c)(1)(iv) for certain tax credit units only if the PHA has adopted a policy applying SAFMRs to its PBV program and met all other requirements in 24 CFR 888.113(h), which are described below. The PHA may not establish or apply different utility allowance amounts for the PBV program. The same utility allowance schedule applies to both the tenant-based and project-based voucher programs.

• Where the proposal or project selection date was on or before the effective dates of either or

both the SAFMR designation/implementation and the PHA administrative policy, the PHA and owner may mutually agree to apply the SAFMR. The application of the SAFMRs must

be prospective and consistent with the PHA administrative plan. The owner and PHA may not subsequently choose to revert back to the use of the metropolitan-wide or county-wide FMRs for the PBV project. If the rent to owner will increase as a result of the mutual agreement to apply the SAFMRs to the PBV project, the rent increase must not be effective until the next annual anniversary of the HAP contract.

• Where the proposal or project selection date was after the effective dates of both the SAFMR

designation/implementation and the PHA administrative policy, the SAFMR must apply to the PBV project if the PHA administrative plan provides that SAFMRs are used for all future PBV projects. If the PHA chooses to implement this administrative policy, the SAFMRs must apply to all future PBV projects located within the same metropolitan area or non- metropolitan county where the SAFMRs are in effect for the PHA's HCV program. An owner and the PHA may not subsequently choose to apply the metropolitan area or county FMR to the project, regardless of whether the PHA subsequently changes its administrative plan to revert to the use of metropolitan-wide or county-wide FMR for future PBV projects. For purposes of this section, the term effective date of the Small Area FMR designation means:

• The date that HUD designated a metropolitan area as a SAFMR area; or
• The date that HUD approved a PHA request to voluntarily opt to use Small Area FMRs for

its HCV program, as applicable. For purposes of this section, the term effective date of the PHA administrative policy means the date the administrative policy was formally adopted as part of the PHA administrative plan by the PHA Board of Commissioners or other authorized PHA officials.