HUD Releases Guidance on HCV Shortfall Funding and CY 2018 Administrative Fees

Earlier today, HUD released Notice PIH 2018-05 titled “Guidance Related to (1) Eligiblity for Potential Shortfall Funding Under the Calendar Year (CY) 2018 Housing Assistance Payments (HAP) Renewal Set-Aside for the Housing Choice Voucher (HCV) Program and (2) CY 2018 Administrative Fees.” Although released today, after the passage of the FY 2018 budget, it appears that this notice was written before the passage of the budget. Certain details may be changed by HUD to better reflect the FY 2018 budget. This notice offers guidance on shortfall funding; administrative fee set-aside funding; and blended rate administrative fees and higher administrative fee rates.

Click below to read a brief overview of the notice.

Shortfall Funding

PHAs that have been identified by their Field Office (FO) or the Shortfall Prevention Team (SPT) as being at risk for a shortfall, should take the following actions to be eligible for shortfall set-aside funds:

1. Work with their local FOs and the SPT and provide additional data and information on their status as requested (PHAs that have not been notified of their potential shortfall status, but believe they may be in a shortfall position, should contact their FO or the SPT);
2. Cease issuing vouchers as of the date the PHA is notified of the potential shortfall–the notice describes some exceptions to this step;
3. Cease absorbing portable vouchers; and
4. Cease issuing vouchers for families that are assisted with Project-based Vouchers, but wish to move with tenant-based assistance.

HUD reserves the right to rescind recently issued vouchers in order for PHAs to be eligible for full set-aside eligibility in egregious situations. [Note: the notice states that the federal government is operating under a full-year Continuing Resolution, but that is not the case. An FY 2018 budget (members only) was passed on Friday, March 23, 2018.]

Administrative Fee Set-aside Funding

HUD intends to set aside administrative fee funding to allocate to PHAs that need additional funds in calendar year (CY) 2018 for the following:

1. Homeownership fees – HUD provides a $200 fee for every homeownership closing reported in PIC for families participating  in the Voucher homeownership, Section 8 Family Self-Sufficiency, or Section 8 Moving-To-Work homeownership programs. PHAs do not need to apply for these fees.
2. Special Fees for Multifamily Housing Conversion – For multifamily housing conversions, a one-time fee of $200 will be provided for each unit occupied on the date of the eligibility event.
3. Special Fees for Portability – Receiving PHAs whose portability  vouchers make up a significant portion of their voucher portfolio are eligible for a special one-time fee. PHAs need not apply for this fee, but should make sure that their Public and Indian Housing (PIH) Information Center (PIC) data is updated and successfully submitted by April 16, 2018 at 5 pm ET.
4. Special Fees for Close-out Audit Costs Related to HCV Voluntary Transfers – Refer to Section 6 of PIH 2015-22 for requesting fees under this category when consolidating programs or transferring vouchers.
5. Other Special Fees under the Secretary’s Discretion – Some funding may be used for on-going administrative fees in order to increase the national fee proration should HUD decide it necessary.

[Note: Although HUD states that there is $10 million for this set-aside in this notice, the FY 2018 budget actually allocates $30 million. This may mean that there will be additional funding for the categories above or that other categories may be added by HUD.]

Blended Rate Administrative Fees and Higher Administrative Fee Rates

1. Blended Rate Administrative Fees – PHAs that serve multiple administrative fee areas may request a blended administrative fee rate based on the actual location of their assisted units. Requests for blended administrative fee rates should be submitted no later than 5 pm ET on April 16, 2018. Electronic requests should be emailed to PIHFinancialManagementDivision@hud.gov.   A sample subject line for the email: “PHA number (e.g., TX001), 2018 Request for Blended Rate Administrative Fees.”
2. Higher Administrative Fee Rates – PHAs that operate over multiple counties may request higher administrative fees. PHAs will be required to submit evidence of actual cost at the end of the calendar years and unused funds will be recouped by HUD through reduced future funding disbursements. The notice details the documents required to be submitted to apply. Electronic requests should be emailed to FinancialManagementCenter@hud.gov by 5 pm CT on May 22, 2018. A sample subject line for the email: “PHA Number: 2018 Request for Higher Administrative Fees.”

The full notice can be found here.