National Housing Law Project Housing Law Bulletin

The following are housing-related regulations and Notices that HUD or USDA have recently issued. For the most part, the summaries are taken directly from summary of the regulation in the Federal Register. The Notice summaries are taken from each Notice’s introductory paragraphs.

Copies of the cited documents may be secured from various sources, including (1) the Government Printing Office’s website on the World Wide Web,/1/ (2) bound volumes of the Federal Register, (3) HUD Clips,/2/ (4) HUD,/3/ and (5) USDA’s/ Rural Development web page./4/ Citations are included with each document to help you secure copies.

Summary: This document makes various corrections to HUD's May 14, 1999 interim rule that merged the Section 8 tenant-based Certificate and Voucher programs.

Effective Date: October 1, 1999.

Summary: This final rule makes two amendments to HUD's February 18, 1999 interim rule regarding public housing agency (PHA) plans. First, this final rule provides PHAs whose fiscal years begin on January 1, 2000, with additional time to submit their first PHA plans to HUD. This final rule also provides that, for purposes of first PHA plan submissions, a PHA will be considered to have submitted its PHA plans on the submission due date, regardless of whether the PHA submits its first plans before that date. This final rule does not address the public comments received on the February 18, 1999 interim rule. Comments will be addressed in a separate rulemaking that HUD is currently developing and expects to publish within the next few weeks.

Effective Date: October 21, 1999.

Summary: This notice announces revised Annual Adjustment Factors (AAFs) for adjustment of Section 8 contract rents on housing assistance payment contract anniversaries from October 1, 1999. The AAFs are based on a formula using data on residential rent and utilities cost changes

from the most current Bureau of Labor Statistics Consumer Price Index (CPI) survey and from HUD's Random Digit Dialing (RDD) rent change surveys.

Effective Date: October 1, 1999.

Summary: This document announces the renewal of the Negotiated Rulemaking Committee on Operating Fund Allocation. The purpose of the committee is to discuss and negotiate a proposed rule that would change the current method of determining the payment of operating subsidies to

public housing agencies (PHAs) as required by the Quality Housing and Work Responsibility Act of 1996 (Public Law 105-276, approved October 21, 1998; 112 Stat. 2461) (the "Public Housing Reform Act").

The original Committee charter will expired on September 30, 1999. Additional time is required for completion of the Committee's work. Therefore, the Secretary of HUD has renewed the Committee charter, in accordance with the provisions of the Federal Advisory Committee Act and the implementing General Services Administration regulations. The Committee will terminate upon completion of the proposed rule, unless the Designated Federal Officer and the Committee members agree to extend the duration of the Committee. In no case will the Committee be extended beyond the publication of the final rule.

Date: August 25, 1999.

Summary: This proposed rule would implement, as required by statute, a new formula system for allocation of funds to public housing agencies for their capital needs. As also required by statute, this proposed rule was developed through negotiated rulemaking procedures.

Comment Due Date: October 14, 1999.

Summary: In accordance with section 102(a)(4)(C) of the U.S. Department of Housing and Urban Development Reform Act of 1989, this document publishes the names and addresses of the award winners and the amount of the awards made available by HUD for Fiscal Year 1998 for the Community Development Block Grant (CDBG) Program for Indian Tribes and

Alaska Native Villages.

Effective Date: August 19, 1999.

Summary: The U.S. Department of Housing and Urban Development (HUD) is amending the NOFA for the Resident Opportunities and Self Sufficiency (ROSS) Program published in the Federal Register of August 10, 1999 (64 FR 43530) by expanding the eligibility of applicants, extending the application due dates, and making clear that all expiring Service Coordinator grants are being renewed. Applicants that have already applied under the August 10, 1999 NOFA need not reapply.

Application Deadline: Completed applications (one original and two copies) must be submitted by the time described in section I. of the August 10, 1999 ROSS NOFA on: November 22, 1999 for Resident Management and Business Development; November 22, 1999 for Capacity

Building and/or Conflict Resolution; and December 21, 1999 for Resident Service Delivery Models. The application period for Service Coordinators’ grant renewals is open until all funds are awarded.

Summary: This Notice directs field office CPD Division Directors to perform the environmental review processing for any EZ projects located within their HUD field office jurisdiction in accordance with 24 CFR Part 50 -- "Protection and Enhancement of Environmental Quality" (hereafter Part 50). EZ grantees must supply field CPD Division Directors with information that would help HUD complete the environmental review procedure under Part 50. The Notice defines the information to be provided by EZ grantees to HUD whenever EZ grantees propose to use EZ or non-HUD funds to acquire, rehabilitate, convert, lease, repair or construct property.

This Notice does not address the eligibility of any activity under the EZ program. EZ activities that are eligible for funding are set for in 24 CFR Part 598 -- "Empowerment Zones: Rule for Second Round Designations" (63 FR 19151).

Summary: The purpose of this Notice is to clarify existing guidance on a medical deduction for Long-Term-Care insurance premiums (LTCIP). Owners and agents have raised questions about the eligibility of LTCIP as a deduction when calculating medical expenses for use in rent setting. Authority is provided by Section 3(b)(5)(C)(i) of the Housing Act of 1937, as amended (42 U.S.C. 1437 note). Further guidance is provided in the Housing regulations at 24 CFR Part 5.603(d), definition of medical expenses. This Notice is for all sponsor/owner/borrowers and Multifamily Hub/Program Center (Hub/PC) staff. The clarification covers all subsidized tenants in insured or assisted housing projects. Section 3-28 and Figure 3-5 of HUD Handbook 4350.3 "Occupancy Requirements of Subsidized Multifamily Housing," explain eligible medical deductions for use in rent calculations either at initial occupancy or later. Health insurance premiums are listed, but LTCIP are neither mentioned as an eligible expense, nor excluded.

A. LTC Insurance Policies:

LTCIP are an eligible medical expense for inclusion in any calculation of medical deductions. LTCIP costs may be considered at initial occupancy (for new tenants), or at the next regular or interim recertification, consistent with current procedures.

Individuals or families wanting LTCIP counted as an eligible medical expense, must sign the certification at Attachment 1, and have this certification included in their occupancy file.

B. Insurance Payment Proceeds (LTCIPR):

Under certain circumstances, LTCIPR must be added to a tenant's gross income. If LTCIPR payments exceed $180 per day for the period covered by the insurance (or $67,700 annually), the amounts exceeding the limits noted should be reported by the tenant in a timely manner and counted toward gross income, consistent with current procedures.

Summary: This Notice sets forth the Fiscal Year 1999 nominal interest rate for the Section 202 and Section 811 Capital Advance Programs. Based on the formula specified in the Housing and Community Development Act of 1987, the interest rate is 5.750 percent.

Summary: Notice H-98-34, issued October 16, 1998, which expires October 31, 1999, provides instructions for the renewal of Section 8 project-based contracts expiring in Fiscal Year 1999. The Notice also sets forth new rules for determining rent increases for renewed contracts. Notice H-99-08, issued May 27, 1999, which expires May 31, 2000, provides clarification and revisions to Notice H-98-34. Notice H-99-08 is being extended along with Notice H-98-34 until

September 30, 2000.

The provisions of these Notices, along with subsequent revisions, including Notice H-99-15, Emergency Initiative to Preserve Below-Market: Project-Based Section 8 Multifamily

Housing Stock, will apply to Section 8 contracts expiring in Fiscal Year 2000 until the Department issues further guidance.

Summary: This Notice supplements Notice PIH-99-22 by transmitting the rider to the renewal HAP contract executed pursuant to Section 514(c) of the Multifamily Assisted Housing Reform Act of 1997 (MAHRA). Notice 99-22 modifies and supplements Notice PIH-98-62 . Notice PIH-98-62 provides instructions for implementing Sections 524(a)(1) and (2) of MAHRA, as amended by Section 597 of the Department of Veterans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act, 1999 (FY '99 Appropriations Act) governing the renewal of housing assistance payments (HAP) contracts under the Section 8 moderate rehabilitation (Mod Rehab) program. When a Mod Rehab property eligible for restructuring enters into a Section 8 renewal HAP contract in accordance with paragraph 6 of PIH Notice 99-22, the PHA must, among other things, execute a Section 514(c) renewal HAP contract with the owner and the attached Rider to the HAP contract (Attachment A-1). For further instructions on Section 514(c) HAP contract renewals, consult PIH Notice 99-22 issued May 20, 1999.

Summary: The purpose of this Notice is to provide information on the availability of a new special fee to reimburse public housing agencies (PHAs) for the extraordinary costs associated with the administration of certain types of "special purpose" tenant-based assistance. The Notice also provides guidance on the funding process for these tenant-based conversion actions.

The Department currently provides Section 8 tenant-based assistance to PHAs to assist eligible residents who are affected by several different types of actions (collectively referred to as "Housing conversion actions") in HUD's Office of Multifamily Housing programs. In many cases HUD and the PHA must work under very tight time-frames to provide the housing voucher assistance to the residents before the families are subjected to significant rent increases or displacement. For example, an owner who prepays the mortgage of a preservation eligible property may in many cases raise the rent in as little as 60 days after the effective date of the prepayment.

The administering PHA must complete a number of tasks within a short amount of time. These tasks include completing and submitting the funding application, determining each individual family's eligibility, reviewing proposed rents, and conducting housing quality standards (HQS) inspections for any potential units.

Given the pressing deadlines associated with most housing conversion actions, HUD has encouraged PHAs to begin tasks such as certifying families and approving units before receiving the ACC funding exhibit to avoid the potentially adverse impact on the families.

HUD is authorizing a special Section 8 fee to assure that a PHA will receive reimbursement for its efforts on a Housing conversion action that ultimately does not occur, and to also reimburse PHAs for any extraordinary administrative costs incurred as a result of assisting HUD with the tenant-based conversion action. This fee only applies when a PHA agrees to administer tenant-based assistance for a potential Housing conversion action.

The purpose of this special fee is twofold: (1) to compensate PHAs for any extraordinary Section 8 administrative costs associated with these special purpose allocations; and (2) to ensure that PHAs will receive reimbursement for their efforts in cases where the conversion action does not occur because of a change of mind of the owner.

This Notice also outlines the general steps necessary to process a Housing conversion action under HUD's new organizational structure. In addition, the Notice addresses several significant programmatic issues affecting the transition from project-based to tenant-based assistance in Housing conversion actions.

Summary: This Notice announces publication of a Section 8 Management Assessment Program technical amendment. The Notice transmits the July 26, 1999 Federal Register publication of the technical amendment and a revised SEMAP Certification, form HUD-52648 (6/99). The technical amendment revises the SEMAP final rule to base ratings for the first seven SEMAP indicators, and for the deconcentration bonus indicator, on the public housing agency's (PHA's) SEMAP certification to HUD rather than on the independent auditor annual audit report. The Office of Management and Budget (OMB) recommended the technical amendment to conform to its requirements under the Single Audit Amendments Act of 1996.

Other changes relate to the conduct of supervising quality control reviews and include:

• Selection from the Waiting List
• Reasonable Rent
• Determination of Adjusted Income
• HQS Enforcement

The Department plans to make additional minor technical amendments to the SEMAP rule in the near future as a result of the merger of the rental voucher and certificate programs. In particular, the fair market rent (FMR) limit component of the SEMAP indicator for FMR and payment standards will be removed. The permissible payment standard range stipulated in the SEMAP rule will be changed to 90 to 110 percent of the published FMR which conforms to the merger rule. The SEMAP Certification form will also undergo another revision to address these issues and to provide for FSS program size reductions based on the number of families who complete their FSS contracts after October 21, 1999.

The Department still expects that the first SEMAP ratings will occur in about April of 2000, for PHAs whose fiscal years end December 31, 1999. The Department will publish a Federal Register notice of the precise effective date for implementation of ratings under SEMAP.

Effective Date: August 25, 1999.

Notes

1    At http:/ /www.access.gpo.gov / su_docs.

2    At http:/ /www.hudclips.org/cgi/index.cgi.

3    To order Notices and Handbooks from HUD, call (800) 767-7468 or fax (202) 708-2313.

4    At http:/ /www.rdinit.usda.gov /regs/.