HUD Opens Fifth Round of COVID-19 Supplemental Payments

HUD’s Office of Multifamily Housing Programs recently announced that the fifth round of application submissions for COVID-19 Supplemental Payments is open for Section 8, Section 202, and Section 811 sites. HUD will make more than $148 million in funding available for owners to submit eligible expenses for reimbursement related to protecting residents and employees from COVID-19. According to HUD, this will be the final round of COVID-19 Supplemental Payments (CSPs).

As a result of reallocations, there is less than $2 million available for Section 202 properties in the fifth round, compared to almost $140 million available for project-based Section 8 properties. HUD has indicated that it will prioritize funding operational expenses over capital expenses in this round.

The reimbursement request deadline for this round is Feb. 21, 2023, for expenses incurred through Jan. 31, 2023. You can find HUD’s notice at www.hud.gov/sites/dfiles/OCHCO/documents/2022-06hsgn.pdf. And updates to form HUD-52671-E (used by a property owner to request a CSP) are currently pending. An updated version of the form is expected to be posted on HUDCLIPS at least 30 days before the application deadline.

This fifth round continues to support reimbursement for the previously eligible operating costs like staffing, security, and cleaning, as well as the previously eligible capital costs like internet infrastructure and backup generator installations. In addition, there are clarifications on eligible expenses that apply for this round of payments. We’ll go over these changes and the CSP request caps for this final round.

What’s Different for Round Five?

The CSP Housing Notice for owners of multifamily assisted housing properties includes important clarifications on eligible expenses, including:

Resident training costs. New reimbursements in this round include resident training on use of technology to access online property management portals and supportive services. This includes staff or contract costs to conduct training for residents on use of technology and “virtual” services that further social distancing goals. Training services may mean using desktop or mobile devices to aid in completing income recertifications, making online maintenance requests, using social media to maintain community connections, and accessing telehealth or other supportive services through an online interface. However, event costs for food or resident participation incentives are not eligible.

Outdoor seating areas. Funds may be requested for certain costs to improve or establish outdoor seating areas that permit socializing with a decreased risk of virus transmission, relative to indoor gatherings. This may include purchases of chairs, benches, tables, umbrellas, tents, shade canopies, and pathway or security lighting. Seating area coverings must not permanently attach to buildings and installation must not involve site excavation, such as for deep post holes or new concrete foundations. HUD notes that purchases for outdoor seating areas that meet operational expenses transaction cut-off requirements may alternatively be requested under “Category A: Operational Expenses,” which receives higher priority funding.

Emergency generator clarification. With this final round, HUD expanded the discussion on how to establish site eligibility for an emergency generator purchase. In the prior round emergency generator costs to protect vulnerable elderly residents from COVID exposure risks associated with evacuations or displacement were allowed. Now, generator costs to protect disabled residents are allowed too. And designation as an elderly property is sufficient to meet the resident eligibility criteria for a generator. If a property doesn’t have this designation, it may also qualify if at least 50 percent of units are occupied by elderly and/or physically disabled households. The owner justification submitted on the HUD 52671-E, the form needed to request CSPs, must discuss the percent of units occupied by elderly and or physically disabled residents.

Your site must also demonstrate power outage risk in one of two ways: (1) by identifying that there has been at least one break in supply of electrical service by the utility provider of four hours or more to the subject property since Jan. 1, 2019, or (2) if the property is located in an area covered by a Presidential Disaster Declaration issued since Jan. 1, 2019. Outages may be due to grid failures, planned provider outages, or weather-related disruptions. If a narrative justification is required for the CSP request (requests exceeding the standard amount only), you should include approximate dates and general cause of the power outages, and if relevant, information on the Presidential Disaster Declaration. HUD may also consider other evidence of risk of lengthy, recurring outages on a case-by-case basis.

Allowable broadband Wi-Fi infrastructure costs. HUD clarified that the establishment of Wi-Fi should be accomplished through installation of a minimal number of strategically located routers and may not be achieved by running high-speed internet cabling into each unit. CSPs may not be used to pay any associated increase in monthly internet service costs for the site, nor will rent or utility allowance increases be granted to pay for the monthly service costs of providing Wi-Fi.  

Also, CSP reimbursement won’t be provided for improvements that duplicate existing availability of internet access. For example, a building that currently has units wired with broadband cabling such as CAT 5 or coaxial cables that allows residents to purchase broadband internet service may not request CSP reimbursement for the cost of additionally layering Wi-Fi access over those same units. However, a site with existing wiring to units could receive CSP reimbursement for the cost of Wi-Fi equipment that establishes new availability in common areas such a community room or lobby, where appropriate. Equipment costs may include hardware, such as modems, routers, extenders, and repeaters. Bluetooth signal boosters and portable cellular service hotspots may not be included as these are typically distinct from the broadband infrastructure.

Time frame flexibilities for eligible capital expenses. HUD acknowledges that supply chain disruptions have impacted availability and installation timelines for generators, air purification technologies, and even broadband internet equipment. As a result, HUD is allowing an extended time frame for delivery and installation of eligible capital expense items. Where the owner is unable to secure a vendor agreement to complete delivery and installation prior to submitting the HUD 52671-E, HUD will allow inclusion of amounts for eligible capital expenses in CSP requests in the following circumstances:

• Payment has been completed AND delivery/installation date has been specified by the vender to occur not later than Oct. 31, 2023; or
• Payment hasn’t been disbursed to the vendor, but legal liability to complete the purchase has been established. This may be accomplished through a legally binding purchase order signed by the owner and vendor, or similar legal contract. Agreements must include delivery/installation no later than Oct. 31, 2023.

Owners including undelivered or uninstalled items in their CSP eligible capital expenses request must subsequently certify to HUD that installation is complete, prior to HUD disbursement of any funds approved for these expenses.

Standard CSP Request Cap

With this round, HUD is keeping the structure for CSP requests the same as in prior rounds and the CSP caps remain unchanged from round four. To calculate the minimum payment for your site, you’ll need to determine the standard CSP amount for your site:

• $2,500 base amount per property
• Add $75 for each HUD-assisted unit
• Add $1,000 if designated as an Elderly Property
• Add up to $1,250 for a budget-based service coordinator program.

The maximum amount for a standard CSP request is $25,000, regardless of property size or characteristics. All requests for payment exceeding $25,000 will be subject to the additional eligibility and supporting documentation requirements.