HUD Multifamily Updates COVID-19 Q&A, Addresses ERA Program

On July 29, HUD’s Office of Multifamily Housing published an update to the COVID-19 Q&A. This is the 11th update to the FAQs since the pandemic began. This update extends certain deadlines and waivers, clarifies previous guidance, and adds new questions regarding the Emergency Rental Assistance program.

Deadline and Waiver Extensions

Here are two deadline and waiver extensions applicable to Project Rental Assistance Contract (PRAC) site owners.

Management and Occupancy Reviews. The Section 8 Project-Based Rental Assistance program is subject to an annual audit and inspection known as a Management and Occupancy Review (MOR). It’s one of the tools HUD uses to monitor a site to ensure that the owner is complying with its HAP contract, management certification, and HUD rules and regulations. MORs ensure that HUD’s multifamily housing programs are administered as intended by identifying deficiencies to eliminate fraud, waste, and mismanagement.

HUD has extended the deadline for which it will allow on-site MORs to be conducted without entering resident units to Sept. 30, 2021 (from May 31, 2021). Prior to the MOR, staff should inform residents that the Performance-Based Contract Administrators (PBCA) may contact them if their unit required repairs due to a REAC inspection deficiency and that the PBCA will be on-site but won’t be entering their units.

Even though PBCAs won’t enter resident units, auditors will still follow-up on REAC inspections made within the last 12 months. In determining whether Exigent Health & Safety (EH&S) and other deficiencies have been corrected, the PBCA must try to follow up on those affected units by contacting the resident by phone or email and documenting the results or attempts made on the MOR report. Site staff must provide this contact information to the PBCA.

Residual Receipt remittance. As a precaution against financial shortfalls during the pandemic, HUD temporarily allowed the suspension of Resident Receipt HAP offsets. HUD is allowing all PRACs to suspend offsets for Residual Receipts through Dec. 31, 2021 (previously May 31, 2021).

Owners of properties receiving Section 8 assistance payments should get approval in advance to offset payments, but the HUD regional and satellite offices have been authorized to suspend the offsets. After Dec. 31, 2021, sites will have to offset HAP vouchers for Residual Receipts in excess of the minimum allowed.

Previous Guidance Clarifications

The following changes to HUD’s Q&A update previous guidance regarding the treatment of unemployment compensation, the advance child tax credit, the CDC’s eviction moratorium, and common area usage.

Unemployment compensation. The FAQs have been updated to show that HUD recognizes that the Federal Pandemic Unemployment Compensation (FPUC) program was reauthorized by the FY 2021 Appropriations Act, but at a reduced amount of $300 per week (down from $600 per week) and extended by the American Rescue Plan Act of 2021. FPUC benefits are available through the week ending on or before Sept. 26, 2021. HUD has determined that FPUC benefits must not be considered annual income.

However, Pandemic Emergency Unemployment Compensation (PEUC) program assistance must be considered annual income. PEUC is an extension of regular unemployment insurance and has been extended to reflect the actual number of weeks of unemployment ending on or before Sept. 26, 2021.

With regard to Pandemic Unemployment Assistance (PUA), if a household member is found to have received PUA benefits they were not entitled to and have to repay the benefits, HUD has stated that the amounts of PUA repaid must not be included when determining household income if evidence of the repayment can be provided by the household member.

American Rescue Plan Child Tax Credit. In July, the IRS started issuing the Advance Child Tax Credit payments. This is the extra $300 per month provided as a child tax credit authorized by the American Rescue Plan of 2021. The child tax credit is available from July 2021 through December 2021.

HUD’s question and answer regarding this topic reflects previously issued April 2021 guidance. The monthly payment from the enhanced child tax credit must be excluded when determining a household’s annual income.

CDC’s eviction moratorium. The nationwide eviction moratorium lapsed on Saturday, July 31. And on Aug. 3, the CDC issued a new, more limited freeze that remains in effect for two months, until Oct. 3. The CDC issued the new order temporarily halting evictions in counties with heightened levels of community transmission in order to respond to recent, unexpected developments in the trajectory of the COVID-19 pandemic, including the rise of the Delta variant. The moratorium is intended to target specific areas of the country where cases are rapidly increasing, which likely would be exacerbated by mass evictions.

In its update, HUD added a new question and answer regarding the penalties for an owner/agent for violating the CDC order. In its answer, HUD refers owner/agents to the HHS/CDC Temporary Halt In Residential Evictions to Prevent The Further Spread of COVID-19 FAQs, the CDC Declaration Form, and more information at https://www.cdc.gov/coronavirus/2019-ncov/covid-eviction-declaration.html.

According to the signed CDC’s order, a person violating the order may be subject to a fine of up to $100,000 or one year in jail, or both, if the violation does not result in a death, or a fine of up to $250,000 or one year in jail, or both if the violation results in a death, or as otherwise provided by law. The order also stated the U.S. Department of Justice may initiate criminal proceedings as appropriate seeking imposition of these criminal penalties.

Common area usage. HUD updated its answer to the question regarding limiting the hours or access to rental offices and indoor common spaces such as community rooms. HUD says that when local rules and health conditions allow the re-opening of community rooms, they must also be made available to tenant organizations and for related purposes without further restrictions.

Emergency Rental Assistance Q&As

HUD added eight questions and answers regarding the utilization of the Department of Treasury’s Emergency Rental Assistance (ERA) program for HUD’s Multifamily Housing programs. HUD answers made the following points:

• For ERA payments to be paid directly to the project, the ERA payment must be used for past due rent and not for future rent payments.
• If a household experiences a decrease in income, they can request the owner adjust their tenant payment so they pay rent proportionate with their current income. Before accepting ERA funds, HUD advises owners to complete any pending reexaminations, and as a best practice to ensure no duplication of assistance, apply any changes to rent retroactive to the first month following the month the change in income occurred.
• If a tenant receives rental assistance funds directly from the ERA or another program and uses it to pay their rent, the owner may accept the payment and doesn’t need to verify the source of funds before accepting payment from the tenant.
• ERA payments are not treated as income when determining household income eligibility or rent.
• Owners can share a participant’s data with ERA program grantees only if that individual consents to the data sharing. ERA program grantees may ask for a copy of the lease or verification of the owed amounts. Owners may provide this information only if the tenant consents. Without this consent, the Treasury Department allows other means for ERA grantees to verify income in place of documentation.
• To ensure there is no duplication of federal benefits, owners must ensure that the amount received from the ERA grantee is for rent due and owners are encouraged to communicate with tenants about ERA program assistance and their obligation to report their participation in a Multifamily Housing program if the family chooses to apply for assistance.
• Owners can’t waive or forgive rent owed or reduce the amount owed for a tenant in order for the tenant to receive ERA benefits.