HUD Issues Guidance on Third-Party Agreements Encumbering Public Housing

On November 29, HUD’s Office of Public and Indian Housing (PIH) issued PIH-2017-24 (HA) titled, “Guidance on Third-Party Agreements Encumbering Public Housing Property.”  The Notice discusses the procedures and requirements for PHAs that enter into a third-party agreement that would encumber the PHA’s use or interest in public housing property. Third-party agreements may take various forms including but not limited to leases, licenses, leaseholds, rights-of-ways, easements, operating agreements, contracts, liens, assignments, and asset transfers.

The Notice discusses the types of third party agreements that are permissible. These include agreements for normal uses associated with the operation of public housing and agreements unrelated to normal uses associated with the operating of public housing. PHAs are responsible in determining whether a third-party agreement requires HUD approval. This is determined via a disposition analysis and an annual contributions contract (ACC) analysis. PHAs may need approval from either HUD’s Special Application Center (SAC) or their Field Office before entering into a third-party agreement, however this is not always the case. The PHA is responsible for determining whether the SAC or the Field Office is responsible for approval.

Lastly, the notice contains requirements for third-party agreements, and contains a suggested HUD rider to third-party agreements.