HUD Publishes Notice Implementing 2024 HCV Funding Provisions

By: Tushar Gurjal, Senior Policy Manager

On May 10, HUD Published a notice titled “Implementation of the Federal Fiscal Year (FFY) 2024 Funding Provisions for the Housing Choice Voucher Program” (PIH Notice 2024-16). The notice describes how the voucher-related funding for 2024 will be implemented. The notice is divided into two sections with the first describing the available funding, while the second discusses implementation of the allocation of the funding.

To calculate renewal funding, HUD establishes a baseline level of funding based on the amount spent in 2023, including adjustments for the first-time allocations of vouchers. The Department then applies an inflation factor and determines HAP renewal funding eligibility for all PHAs. If HAP renewal funds do not match eligibility, HUD creates a proration factor, which is applied to each PHA. Finally, the Department conducts an offset (the Department will fund some agencies less than their eligibility expecting those agencies to dip into their reserves, so they can fund other agencies without reserves enough money to fully fund their renewals) for some Expansion Moving to Work (MTW) and non-MTW agencies to ensure that all agencies are able to meet their renewal funding needs.

There is $337 million for Tenant-Protection Vouchers (TPV) in 2024. Tenant-Protection Vouchers will be provided for eligible units that were occupied by an assisted family within the previous 24 months that are no longer available as assisted housing, though HUD may later suspend this policy. Five million dollars of the TPV allocation will be set-aside to provide TPVs for certain at-risk households in low-vacancy areas. The Department calculates TPVs based on a PHA’s per unit cost (PUC), but if the PHA believes that this is not sufficient, it can request an increase with a justification for why the increase is reasonable.

In 2024, the appropriations act provides $2,771 million for administrative fees. Of this amount, $30 million is available for special administrative fees. The Department disburses administrative fees monthly, while doing quarterly reconciliations. Housing agencies may request blended administrative fees (where PHAs serve multiply areas and qualify for different administrative fee rates) by emailing HCVBlendedRateRequests@HUD.gov by July 12, 2024. Housing agencies may request higher administrative fee rates, if they serve two or more counties and submit evidence of higher costs by emailing FinancialManagementCenter@hud.gov by July 12, 2024.

There is $30 million for special administrative fees.

• HCV Homeownership Fees – HUD is providing a $1,500 special fee for every homeownership closing. This is an increase of $500 from the prior year. There is also a one-time $2,500 special fee for each newly created homeownership program.
• Special Fees for PHAs that administer TPVs in Connection with Multifamily Housing Conversion Actions – There is a special fee of $350 dollars for each unit occupied when the conversion action occurs.
• Special Fees for Portability – PHAs with lots of port-ins (equal to 20% or more of the PHA’s total leased vouchers) will be eligible to receive these special fees.
• Special Fees for Audit Costs for Declaring Major HCV Programs per Notice 2021-08 and for HCV voluntary Transfers – In certain instances, HUD will require some PHAs to procure Independent Public Accountant (IPA) services for financial and compliance procedures specified by HUD.
• Special Fees Needed for Participation in Small Area Fair Market Rent (SAFMR) community of Practice – This a group of PHAs that have or will implement SAFMRs. Those PHAs that will have to implement SAFMRs are encouraged to join this group. PHAs have until August 1, 2024 to respond after HUD has contacted them to join. Housing agencies that respond will receive a one-time fee of $1,000.
• Planning for Mobility-related Services – These fees are for PHAs that develop a housing mobility-related services plan. A separate notice will describe the planning requirements and application process.
• Special Fees for PHAs for New FUP/FYI Vouchers Awarded in 2024 – For PHAs that were awarded a FUP/FYI voucher in 2024, a one-time fee of $750 will be provided.
• Special Fees Needed for Administration of Section 8 Tenant-Based Rental Assistance Program  – Housing agencies that may have increased administrative expenses, including as a result of tenant protection rental assistance, disaster related vouchers, SAFMRs, other special purpose vouchers, can request special feels.

To request the special fees in the last bullet point above, PHAs must submit via DocuSign and complete an online form. The special fee DocuSign instructions can be found here. Special Fees under FUP/FYI categories have a deadline of July 5. To request special fees under Category 3, Disaster Related, the application must be received no later than October 31, 2024. The notice gives two deadlines for the SAFMR category, either July 5 (p. 15 of the notice) or October 31 (p. 19 of the notice). The notice also gives conflicting deadlines for Category 3 – Secretary’s Discretion of October 31 (p. 15) or July 5 (p. 18). NAHRO has contacted HUD about this and the agency has stated that they are aware of the problem and will be fixing it.

Special fee application categories include the following:

• Category 1 – Family Unification Program and FYI iIitiative Special Fees – available to PHAs actively administering FUP/FYI vouchers awarded prior to 2024.
• Category 2 – Disaster Related Special Fees – for future allocation of disaster vouchers.
• Category 3 – Application for other Special Fees under The Secretary’s Discretion – HUD will consider requests on a case-by-case basis.
• Category 4 – Special Fees for SAFMR and SAFMR-Based Exception Payment Standards – HUD is making funding available under two categories. First, up to $10,000 is available for reimbursement of costs associated with the adoption of SAFMRs. Second, there is up to $10,000 available for reimbursement of costs with establishment of SAFMR-based exception payment standards (i.e., adopting SAFMRs in only certain zip codes in the PHA’s jurisdiction).

There is $15 million available for HUD-VASH vouchers. Of this amount, $5 million is available for new vouchers, while $10 million is available for administrative fees and other program costs. HUD will issue guidance on this allocation in the future.

There is $743 million for renewal funding and administrative fees for Mainstream vouchers. Of this $10 million is available for a Mainstream voucher HAP set-aside. This amount can be accessed for shortfall (i.e., preventing terminations because of insufficient funding) and unforeseen circumstances (adjustments in voucher allocations where there have been high costs). The general HAP set-aside application can be used for Mainstream vouchers as well.

The budget provides $200 million for a HAP set-aside. Awards will be made to eligible PHAs, but they will be reduced if the PHAs have available reserves. Emergency Housing Vouchers (EHVs) are not eligible for these set-aside funds and Mainstream vouchers have their own set-aside funds, but can apply by following the instructions for Category 1 and Category 2a. The Department may prioritize funds to prevent terminations due to insufficient funding. To apply for the HAP set-aside, PHAs must go through an application process detailed in the HCV set-aside applicant DocuSign Instructions.

The HAP set-aside categories are the following:

• Category 1: Prevention of Terminations Due to Insufficient Funding (shortfall) – This is for PHAs that despite taking reasonable cost saving measures would otherwise be required to terminate participating families from the program due to insufficient funds. The deadline for the application of these funds is March 10, 2025.
• Category 2a: Unforeseen Circumstances – If a PHA experiences an unforeseen circumstance after re-benchmarking which it could not have reasonably foreseen and was out of the PHA’s control, the PHA may qualify for funding under this category. To be eligible, a PHA’s PUC must be two percent or greater than the PUC HUD used to determine the PHA’s 2024 renewal funding. The deadline to apply for these funds is June 14, 2024.
• Category 2b: Portability – To be eligible for this funding, a PHA must have experienced significant cost increases due to portability. If the portability average HAP PUC exceeds 110% of the HCV program-wide average HAP PUC, the PHA will be eligible. The deadline to apply for this is June 14, 2024.
• Category 3a: PBVs – To be eligible for this, the PHA must show that vouchers were withheld from use during the CY 2023 re-benchmarking period to meet a PBV commitment. The deadline to apply is June 14, 2024.
• Category 3b: MTW Expansions agencies – To be eligible for this funding, an MTW Expansion PHA must demonstrate that funds were obligated to the PHA, but not expended and show through documentation that the funds were obligated for an MTW-eligible commitment/activity for the development of affordable housing. The deadline to apply for this category is June 14, 2024.
• Category 4: HUD-VASH – PHAs with HUD-VASH vouchers may use this funding for PUC increases or because of increased leasing beyond their renewal funding. The deadline to apply for this category is September 27, 2024.
• Category 5: Lower-Than-Average Leasing – Non-MTW agencies and MTW expansion agencies may apply for this funding. To be eligible, a PHA must be leasing a lower-than average percentage of their authorized vouchers and have low amounts of budget authority in their reserve accounts. Housing agencies must lease additional vouchers with this award. The deadline for this category is June 14, 2024.
• Category 6: Disaster – PHAs that have experienced increased costs of loss of units in a Presidentially declared disaster in 2023 or 2024 are eligible for funding under this category. The deadline for this category is December 27, 2024.
• Category 7: NLT Inspection Withheld Housing Assistance Payments – PHAs that show that after the establishment of the PHA’s HAP renewal funding baseline, the PHA paid the owner HAP that was withheld during 2023 in accordance with the requirements of the non-life-threatening initial inspection option. The deadline for this category is June 14, 2024.

For the initial 39 MTW agencies, their funding is determined pursuant to their MTW contracts. For MTW Expansion agencies, their renewal HAP is calculated based on both the previous year’s HAP expenses and the previous year’s eligible non-HAP MTW expenses that are reported in the Voucher Management System (VMS).

Housing agencies may request frontloading of HAP when their reserve accounts will not cover expenses for a month. Housing agencies may only use funds in HAP reserve accounts for eligible HAP needs. Housing agencies may not lease more vouchers than their annual contribution contract amounts, except for MTW agencies.

The full notice can be found here.