HUD Implements Statutory Changes in FY 2014 Omnibus Appropriations Bill

On June 25, HUD published a notice of statutory changes in the Federal Register implementing provisions included in the FY 2014 Omnibus Appropriations Bill enacted in January 2014. The notice, effective July 1, 2014, establishes the terms and conditions for implementing changes to the frequency of required housing inspections, the statutory definition of “extremely low-income” (ELI), and utility allowances.

ELI limits revision. This is the only part of the notice that applies to HUD’s project-based Section 8 program. The other changes apply to the Public Housing program and the Section 8 Housing Choice Voucher and project-based voucher programs. According to the notice, the Section 8 Income Targeting requirement hasn’t changed—at least 40 percent of households with move-in or initial certifications within the site’s fiscal year must meet the ELI limit.

Effective July 1, 2014, ELI limits are defined as “very low-income families whose incomes do not exceed the higher of the Federal poverty level or 30 percent of Area Median Income (AMI).” This is the first time that the federal poverty level has been taken into consideration.

The Department of Health and Human Services (HHS) provides three charts showing the poverty level in the United States: one for the 48 contiguous states, one for Alaska, and one for Hawaii. You can view the 2014 Poverty Guidelines at the following HHS website: http://aspe.hhs.gov/poverty/14poverty.cfm.

The definition affects ELI targeting requirements for the public housing, voucher, project-based voucher, and project-based Section 8 programs. This new definition of ELI, however, is the only change applicable to the project-based Section 8 program.

Inspections. The FY 2014 appropriations bill allows public housing authorities (PHAs) to inspect assisted units during the term of the housing assistance payment (HAP) contract at least biennially instead of annually. It also allows PHAs to use alternative inspection methods. According to the notice, HUD is implementing this change in a limited fashion and will seek input during the rulemaking process on how to fully implement these changes. PHAs are still required to conduct an initial inspection, before entering into a HAP contract, and interim inspections, if a family or government official notifies the PHA of a unit’s failure to comply with housing quality standards (HQS).

The change to biennial inspections is effective for any unit under a HAP contract where the PHA has conducted an HQS inspection within the 12 months preceding the notice’s July 1 effective date. If an inspection was conducted during that time frame, the PHA won’t be required to re-inspect until the lapse of 24 months following the last inspection. But if the most recent inspection occurred before that time frame, the PHA is required to conduct an annual HQS inspection.

A PHA may comply with the biennial inspection requirement through an inspection conducted for a different housing assistance program such as the HOME Investment Partnerships (HOME) or the Low Income Housing Tax Credit programs. A PHA may also rely on inspections conducted by HUD, such as one performed by HUD’s Real Estate Assessment Center. A PHA only needs to amend its administrative plan to use one of these options.

If a PHA chooses a different standard, it must submit to its local HUD field office a certification affirming that the standard “provides the same or greater protection to occupants of dwelling units meeting such standard or requirement” as would HQS.

Utility allowances. The FY 2014 appropriations bill limits the utility allowance payment for tenant-based vouchers to the family unit size for which the voucher is issued, regardless of the size of the unit rented by the family, with an exemption for families with a person with disabilities. Therefore, the utility allowance for a family is the lower of the utility allowance amount for the family unit size or the utility allowance amount for the size of the unit rented by the family.

At the request of a family with a person with disabilities, the PHA must approve a utility allowance higher than the applicable amount if such a higher utility allowance is needed as a reasonable accommodation. This change applies to vouchers issued after July 1 and to current program participants. For current tenants, a PHA must implement the new allowance at the family’s next annual reexamination, provided that the PHA is able to provide the family with at least 60 days’ notice prior to reexamination.