HUD Publishes Mod. Rehab. CARES Act Waiver Notice

Earlier today, HUD published a notice titled ‘Section 8 Moderate Rehabilitation Program – CARES Act Supplemental HAP Funding Allocation and COVID-19 Waivers and Alternative Requirements” (PIH 2020-20). This notice allocates additional funding for PHAs with Moderate Rehabilitation (Mod. Rehab.) programs and establishes voluntary waivers and alternative requirements that may be used by PHAs. This notice only applies to the Mod. Rehab. program administered by the Office of Public and Indian Housing and does not apply to the Section 8 Moderate Rehabilitation Single Room Occupancy (SRO) program.

Funding

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $1 billion for project-based rental assistance (PBRA). The Department is allocating $10 million of that amount for the Mod. Rehab. program. Funds will be obligated to PHAs by the week of August 24, 2020. Allocation amounts will be calculated by looking to the average monthly Mod. Rehab. renewal funding amount per PHA and applying a proration factor to ensure that the aggregate distributed amount does not exceed the $10 million allocated. Housing agencies may request these funds by contacting their financial analyst at the Financial Management Center (FMC). Detailed instructions for accessing the funds can be found on PHAs’ Amended Annual Contribution Contract (ACC) cover letters.

Housing agencies must use the CARES Act Mod. Rehab. funding for Housing Assistance Payments (HAP) or for vacancy payments. The period of availability for these funds is until the end of calendar year (CY) 2020, unless HUD chooses to extend this period. These funds may not be used for administrative expenses, repaying debts, or amounts owed to HUD or program participants. Recipients who receive more than $150,000 in total CARES Act funding may have certain other reporting requirements.

Waivers

In this notice, HUD is providing a list of optional waivers and alternative requirements that a PHA may voluntarily use. Agencies are required to keep written documentation of waivers used and their effective dates. An agency does not need to notify HUD that it is beginning to use these waivers, though HUD may request this information at a future date. Agencies are required to publicly post or make available a list of the waivers or alternative requirements. The PHA must also inform affected families and owners of the waivers or alternative requirements. In general, the use of these waivers extends until December 31, 2020.

The waivers in this notice include the following:

• MR-1: Family income and composition: delay annual examinations – PHAs may delay annual reexaminations of Mod. Rehab. families until Dec. 31, 2020.
• MR-0: Family income and composition: annual examination; income verification requirements – HUD is waiving the requirement to use the income hierarchy and will allow PHAs to forgo third-party income verification requirements for annual reexaminations, including the use of Enterprise Income Verification (EIV), if the PHA wishes to conduct the annual recertification. During the period of this waiver, a PHA may consider self-certification (including over the phone, if there’s a PHA contemporaneous written record) as the highest form of income verification to process annual reexaminations. This waiver may be used until Dec. 31, 2020.
• MR-3: Family income and composition: interim examinations – HUD is waiving the requirement to use the income hierarchy and will allow PHAs to forgo third-party income verification requirements, including the use of EIV. During the period of this waiver, a PHA may consider self-certification (including over the phone, if there’s a PHA contemporaneous written record) as the highest form of income verification to process annual reexaminations. This waiver may be used until Dec. 31, 2020.
• MR-4 Enterprise income verification (EIV) monitoring – HUD is waiving the EIV monitoring requirements (monitoring the Deceased Tenants Report, the Identity Verification Report, etc.). Since reports are overwritten, monthly or quarterly reports must be downloaded periodically to preserve the information until Dec. 31, 2020.
• MR-5: PHA inspection requirement: annual inspections – PHAs may delay annual inspections for Mod. Rehab. units. Delayed inspections must be completed as soon as reasonably possible, but no later than one year after the date of the annual inspection would have been required. Owners must still maintain the unit in accordance with Housing Quality Standards (HQS).
• MR-6: Adjustment of Utility Allowance – PHAs may delay the annual review and update of utility allowances. Any review and update must be completed by Dec. 31, 2020.

The full notice may be found here.