How to Qualify for Second Round COVID Relief Funds

In the CARES Act, enacted in late March, Congress approved relief funds for federally assisted housing providers in the Section 202, Section 811, and project-based Section 8 programs. Specifically, the CARES Act provided:

• $1 billion for Project-Based Rental Assistance for Section 8;
• $50 million for Housing for the Elderly (Section 202); and
• $15 million for Housing for Persons with Disabilities (Section 811).

HUD completed reviews of all COVID-19 Supplemental Payment (CSP) requests received in August, and most sites that went through the application process received funds by October.

HUD has recently announced a second round of relief payments. On Nov. 24, the Office of Multifamily Housing published Housing Notice H-2020-11, “Continued Availability of COVID-19 Supplemental Payments to Section 8, Section 202, and Section 811 Properties.” This is the second application period for owners of Multifamily-assisted properties to apply for CARES Act supplemental funds to offset site expenditures to serve residents safely in light of COVID-19 social distancing requirements. 

What Expenditures Are Eligible?

CSPs help address operating cost increases owners incur to prevent, prepare for, or respond to COVID-19 at their sites, including to maintain normal operations and to take other necessary actions while project-based Section 8, Section 202, and Section 811 programs are impacted by coronavirus. CSPs will supplement regular Housing Assistance Payment (HAP), PRAC, PAC, and SPRAC funds for project expenses related to COVID-19 that are generally consistent with existing program guidance identifying eligible and ineligible project expenses/operating costs.

CSPs are intended to address temporary cost increases associated with property management during the period of national COVID-19 impact and are not available for capital costs, including major equipment or construction expenditures. HUD may approve use of reserve for replacement or residual receipts for these purposes.

CSPs are available only to offset actual expenditures and may not fully reimburse all COVID-related costs. CSPs are not a means to receive funding for lower tenant rent contributions due to income reductions, extended vacancies, or unpaid tenant charges. To the extent allowable under current policies, these financial impacts can be addressed through Special Claim payment requests and through tenant recertifications with corresponding subsidy voucher adjustments.

HUD has detailed the expenditures that will qualify for CSP reimbursement:

• Increased frequency of cleaning and disinfecting common areas and property management offices as a preventative measure.
• Intensive deep cleaning and sanitization services in response to the presence of COVID-19 cases at the site, which may include treatment in units being prepared for re-occupancy, in addition to common areas.
• Office technology and other equipment needs to facilitate social distancing.
• Personal protective equipment (PPE) such as face masks and goggles, gloves, hand hygiene products for use by site staff and for residents entering leasing offices or using common areas.
• Facility and equipment expenses related to maintaining adequate social distancing, including but not limited to cough/sneeze barriers or modifying or limiting access to communal spaces.
• Site control measures in support of shelter-in-place orders, stay-at-home orders, or visitor restriction policies at sites.
• Temporary staffing, contract services, overtime pay, and/or supply expenditures to maintain or enhance ongoing service coordination at sites designated to serve the elderly or persons with disabilities (excludes service coordinator positions funded by a Multifamily Service Coordinator Grant).
• Temporary staffing increases to process higher-than-normal volumes of interim tenant recertifications requested by tenants due to loss of income (includes overtime and new positions; excludes “hazard pay” bonuses).

HUD says sites may request funds for expenses incurred from March 27 to July 31 only in very limited circumstances. But reimbursement for expenses incurred from Aug. 1 through Nov. 30, are available more broadly. In filling out HUD Form 52671-E, Covid-19 Supplemental Payment Request, you must indicate whether your request is for expenses in the first operating period (March 27 to July 31), the second operating period (Aug. 1 to Nov. 30), or from both.

Sites Must Be ‘In Good Standing’

To receive funding through a CSP, a site must be in good standing with HUD. In other words, if the site received a less than satisfactory rating on its last Management and Occupancy Review, corrective actions satisfactory to a contract administrator (CA) and/or HUD must have been taken, or a plan for those corrective actions and an acceptable time frame for their completion must have been approved by HUD or the CA.

Likewise, sites requesting a CSP must have a REAC score of at least 60 or, if they don’t, must have submitted a plan that’s acceptable to HUD to correct any identified deficiencies.

Also, the owner must be current in the submission of audited or owner-certified Annual Financial Statements (AFS), if applicable, and must not have any outstanding findings.

Finally, owners must be actively vouchering for monthly subsidy for a property in order to be eligible for a CSP for that site.

Act Fast to Request Funding

Owners must submit updated form HUD-52671-E, found at www.hud.gov/sites/dfiles/OCHCO/documents/52671-e.pdf. Owners must also submit the accompanying certifications and signature page to the office that currently processes their monthly voucher payment, the CA, or the administering HUD field office.

All owners of Section 8 sites that are subject to a HAP contract administered by a Performance-Based Contract Administrator (PBCA) must submit requests to their PBCA. Sites with contracts currently administered by HUD or by a traditional CA must submit directly to the relevant regional HUD office.

CSP funding is not being provided on a first-come, first-served basis. All requests received by HUD or the PBCA by 11:59 p.m. local time on Dec. 11 will be given equal consideration. Requests received after this deadline may be evaluated at HUD’s discretion only after all other eligible CSPs have been funded. HUD says that in no case will requests received after Dec. 18 be considered for funding. Owners may submit only one request form per site for each operating period.