HUD Issues Guidance for Provisions in the Streamlining Administrative Regulations Final Rule

HUD recently released HUD Housing Notice 2016-09, Streamlining Administrative Regulations for Multifamily Housing Programs. The notice provides guidance regarding the implementation of the Streamlining Final Rule. According to HUD, the Streamlining Rule will allow for improvements in program operations that reduce costs and enhance efficiency while maintaining HUD’s core program oversight functions. There are 16 programmatic changes found in this final rule, four of which apply to Multifamily Housing programs. The final streamlining rule was issued in March 2016.

The notice applies only to programs administered by the HUD Office of Multifamily Housing. They include Project-based Section 8; Section 101 Rent Supplement; Section 202 PAC; Section 202 and 811 PRAC; Section 202 Senior Preservation Rental Assistance Contract (SPRAC); Section 811 Project Rental Assistance Demonstration Units under a Rental Assistance Contract (PRA); Section 236; Section 236 RAP; and Section 221(d)(3) BMIR. The Streamlining Final Rule introduced or confirmed the following changes for Multifamily Housing programs.

Definition of Extremely Low Income

This change applies only to the Section 8 program. In 2014, HUD announced a new definition for the extremely low income limit (ELI) to ensure that ELI was never greater than the poverty level in any given area. The 2014 Consolidated Appropriations Act defines extremely low-income families as very low-income families whose income does not exceed the greater of the federal poverty guidelines as published by the Department of Health and Human Services or 30 percent of area median family income.

Inclusion of Mandatory Fees and Charges with Tuition

This change was originally introduced with HUD Housing Notice 2015-12, Amendment to the Definition of Tuition, and it applies only to the Section 8 programs other than the Section 8 Mod Rehab program. HUD has adopted the Department of Education’s definition of tuition, which includes certain mandatory fees such as lab fees or other fees associated with the pursuit of a particular degree or certification.

If you discuss inclusion of educational financial aid in your Tenant Selection Plan, you should update the information to explain that you will include educational financial aid in excess of tuition and certain fees unless the student is living with his or her parents receiving Section 8 assistance or the student is over the age of 23 with a dependent child. Financial aid received from people living outside the unit is not counted if the student meets the definition of “vulnerable youth.”

Verification of Social Security Numbers

The Streamlining Final Rule was effective April 6, 2016, and it applies to Rent Supplement, Section 8, Section 221(d)(3), Section 236, Section 202, and Section 811. The rule changed the SSN disclosure exception for children under the age of 6 who were added to the household within six months of the move-in or initial certification date. The regulation now permits owners to accept applicant households that include an applicant family member under the age of 6, who does not yet have a SSN and was added to the household six months or less from the move-in date. However, if the child was added to the household more than six months prior to move-in, the child must have a SSN in order to move into the unit.

The owner must give the applicant 90 days from the effective date of the move-in certification to provide SSN documentation for the child. An additional 90 days must be granted if the failure to provide SSN documentation is due to circumstances that are outside the control of the household, such as delayed processing by the SSA, natural disaster, fire, or death in the family. During this time, the child will be counted as part of the household and will receive all program benefits, including the dependent deduction. Once the SSN is provided, an interim recertification is required.

Streamlining Verification of Fixed Income

This change applies to Project-based Section 8 properties, including 202 and 811 sites. As of April 2016, owners have the option of verifying fixed income subject to cost of living adjustments every three years instead of every year. This would apply to various sources of fixed income including Social Security, Veterans Disability, state SSI (when SSI is not subject to change), fixed pensions, etc.

If Social Security income information is available in the Enterprise Income Verification (EIV) system, you should use EIV to verify income. However, if income information is not in the EIV or if the resident disputes the EIV information, then you may use this new method to verify income.