HUD Publishes 2023 HCV Funding Notice

On April 4, HUD published a notice titled “Implementation of the Federal Fiscal Year (FFY) 2023 Funding Provisions for the Housing Choice Voucher Program.” This notice details the process by which HUD will implement and allocate funding from the 2023 appropriations bill for the Housing Choice Voucher (HCV) program. One change from prior implementing notices is that set-aside applications for additional funding must be accepted through DocuSign.

The notice describes several aspects of the HCV portion of the appropriations act, including how renewal funding is calculated (using the same renewal formula that has been in use for the last several years).

Tenant Protection Vouchers (TPVs)

The notice notes that the act provides $337 million for TPVs. Of that amount $5 million is set aside for TPVs to certain households in low-vacancy areas. It also describes the process by which TPVs may be requested. The Department notes that HUD will provide TPVs for vacant units that were occupied within the previous 24 months, though HUD reserves the right to suspend that policy.

Administrative Fees

The notice states that the appropriations act provide approximately $2,778 million for administrative expenses. Of that amount, $30 million will be made available for special administrative fees. The notice details the procedures to apply for blended administrative fees and higher administrative fees.

• Blended Administrative Fees (Application Deadline – July 14, 2023) – these fees are for housing agencies serving multiple administrative fee areas based on the location of their assisted units.
• Higher Administrative Fee Rates (Application Deadline – July 14, 2023) – these fees are for housing agencies that serve two or more counties, though the PHA will be required to submit evidence of actual costs at the end of the calendar year (CY) to determine if the approved increase was needed.

Special administrative fees are also available for the following reasons:

• HCV Homeownership Fees – HUD provides a $200 fee for every homeownership closing;
• Special Fees for PHAs that Administer TPVs in Connection with Multifamily Housing Conversion Actions;
• Special Fees for Portability – PHAs must have been administering enough port-in vouchers to equal 20% or more of the total number of leased vouchers;
• Special Fees for Audit Costs for Declaring Major HCV Programs per Notice 2021-08, and for HCV Voluntary Transfers per PIH Notice 2018-12;
• PIH Notice 2018-12, Section 6 (closing out or transferring HCVs); and
• Special Fees Needed for Administration of Section 8 Tenant-Based Rental Assistance Program.

Special administrative fees may also be used for the following:

• Category 1 – HUD-VASH Special Fees;
• Category 2 – Family Unification Program Special Fees;
• Category 3 – Disaster Related Special Fees – Additional guidance on this will be provided in the future;
• Category 4 – Application for other Special Fees under The Secretary’s Discretion;
  • Special Fees for SAFMR and SAFMR-Based Exception Payment Standards;
  • Special Fees for New Incremental Vouchers – guidance for this category will be forthcoming; and
  • Planning for Housing Mobility-related Services – guidance for this category will be forthcoming.

HUD-VASH Funding

The notice states that the appropriations act provides approximately $50 million for HUD-VASH funding. At least $40 million will be used for new incremental vouchers, while up to $10 million may be used for administrative fees. Additional guidance will be forthcoming.

Tribal HUD-VASH Renewals

The appropriations act provides up to $7.5 million for HAP renewal and administrative fees for the Tribal HUD-VASH program.

Mainstream Vouchers

The appropriations act provides approximately $607 million for renewal funding and administrative fees for Mainstream vouchers. The act also provides up to $10 million for set-aside funding:

• Category 1 – Prevention of Terminations Due to Insufficient Funding (shortfall); and
• Category 2 – Unforeseen Circumstances.

Family Unification Program (FUP)

The act provides $30 million for the FUP program. Of this amount, $25 million must be used for the foster youth to independence (FYI) initiative, while $5 million must be for FUP allocated through a notice of funding opportunity (NOFO). The Department will scrutinize the utilization of any non-competitive awards and recapture and reallocation unused amounts. Guidance will be forthcoming.

New HCV Incremental Vouchers

The act provides $50 million for new incremental vouchers. Additional guidance will be forthcoming.

Housing Assistance Payments (HAP) Set-Aside

The appropriations act provides $200 million in HAP set aside. Awards in this category may be reduced if PHAs have available reserves. The Department may prioritize funding for category 1. Applications must be completed using DocuSign. The set-aside categories are the following:

• Category 1 – Prevention of Terminations Due to Insufficient Funding (shortfall);
• Category 2a – Unforeseen Circumstances;
• Category 2b – Portability;
• Category 3a – PBVs;
• Category 3b – Moving to Work (MTW) New Cohorts;
• Category 4 – HUD-VASH;
• Category 5 – Lower-Than-Average-Leasing;
• Category 6 – Disaster; and
• Category 7 – Non-Life-Threatening Inspection Withheld Housing Assistance Payments.

MTW Agencies

The original 39 MTW agencies are subject to their MTW contracts. For MTW expansion agencies, HAP renewal funding is calculated by prior year actual expenses, which are different for MTW agencies.

Miscellaneous HAP provisions

Housing agencies may ask to have their HAP front loaded. Housing assistance payments may only be used for valid eligible purposes.

Administrative Fee Eligible Uses

Administrative Fee eligible uses are detailed in PIH 2022-18.

The notice also includes certain other miscellaneous provisions.

Instructions on using DocuSign can be found here. A video on using DocuSign to apply for HCV HAP Set-Aside applications can be found here.

The full notice can be found here.