National Housing Law Project Housing Law Bulletin

The following are housing-related regulations and Notices that HUD and other federal agencies have recently issued. For the most part, the summaries are taken directly from the agency's summaries in the Federal Register. The Notice summaries are taken from their introductory paragraphs.

Copies of the cited documents may be secured from various sources, including (1) the Handsnet folder at Legal Services/Substantive Law/Housing Forum, (2) the Government Printing Office's spot on the World Wide Web,¹ (3) bound volumes of the Federal Register, (4) HUD Clips,² and (5) HUD.³ Citations are included with each document to help you secure copies.

HUD Regulations

Implementation of the Native American Housing Assistance and Self-Determination Act of 1996; Proposed Rule
24 C.F.R. Parts 950, 953, 955, 1000, 1003 and 1005
62 Fed. Reg. 35,718-35,751 (July 2, 1997)

Summary: This proposed rule would implement the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA). NAHASDA reorganizes the system of federal housing assistance to Native Americans by eliminating several separate programs of assistance and replacing them with a single block grant program. Beginning on October 1, 1997, the first day of Fiscal Year 1998, a single block grant program will replace assistance previously authorized under:

HUD Federal Register Notices

Assessment of the Reasonable Revitalization Potential of Certain Public Housing Required by Law; Further Amendment to Timeframes
62 Fed. Reg. 35,828 (July 2, 1997)

Summary: On September 26, 1996, HUD published a Notice that implements Section 202 of the Omnibus Consolidated Rescissions and Appropriations Act of 1996. Section 202 requires PHAs to identify certain distressed public housing developments that will be required to be replaced with tenant-based assistance if they cannot be revitalized by any reasonable means.

The original Notice established steps that PHAs were to take in this process and set deadlines for taking each step. The first step was to identify buildings on contiguous sites that had 300 or more units and were 10 percent or more vacant. The next step was to determine whether providing vouchers to the remaining tenants would be cheaper than continuing the project as public housing. Those two steps were to have been completed by December 29, 1996. The third step was to determine whether the project was distressed and whether its long-term viability could be maintained. That step was to have been completed by February 27, 1997. The final step, for distressed projects whose long-term viability could be assured, was to develop a plan to convert to vouchers. That step was to have been completed by August 26, 1997.

On December 26, 1996 (at 61 Fed. Reg. 68,048), and on March 24, 1997 (at 62 Fed. Reg. 13,894), HUD extended the deadlines for accomplishing the second, third and fourth steps. This Notice changes the timeframes once again, because HUD has decided to issue an interim rule that will substantially modify the standards.

The new deadlines for submissions to HUD field offices are as follows:

Summary: HUD is carrying out a statutory demonstration program intended to test approaches that reduce the cost of the ongoing federal subsidy for FHA-insured, Section 8-assisted housing while preserving this critical affordable housing resource in good physical and financial condition. The guidelines for the demonstration program were published on January 23, 1997, at 62 Fed. Reg. 3,567.

One method HUD may use to carry out the demonstration is to form limited partnerships with nonprofit designees that are authorized to assume some of the functions, obligations, and responsibilities and to receive some HUD benefits. The designee process is detailed in Section VII of the guidelines (62 Fed. Reg. 3,578-3,580). In accordance with the guidelines, HUD published a Notice of Request for Qualifications (RFQ). The RFQ was directed to nonprofit organizations interested in participating in the designee process.

HUD seeks to form a limited partnership with a nonprofit organization to restructure a portfolio of about 20 to 50 FHA-insured multifamily mortgages on projects scattered throughout the United States. The objective of the partnership will be to restructure project debt so as to achieve financial stability for the project at the least cost to the federal government, while addressing the other goals of the demonstration program. The partnership will be structured as a limited partnership, with the designee as managing general partner and HUD as limited partner. The response to the RFQ was due at HUD on August 13, 1997. HUD intended to conclude its selection process on or before August 27, 1997. It intends to qualify two or more nonprofit organizations that will bid to become HUD's partner. In FY 1997, HUD expects to enter into one such participation arrangement with a qualified nonprofit designee.

Notice of Fiscal Year 1997 Funding for the Section 8 Rental Certificate and Rental Voucher Programs; Notice
62 Fed. Reg. 33,951-33,957 (June 23, 1997)

Summary: This Notice provides general information about the Section 8 certificate and voucher program budget authority made available by HUD's FY 1997 Appropriations Act and additional carryover budget authority that is available for use in FY 1997. This Notice also describes the application process for making these Section 8 funds available to public housing agencies (HAs), including Indian housing authorities, during FY 1997 (October 1, 1996, to September 30, 1997). The following are the categories for which Section 8 certificate and voucher funds will be offered during FY 1997 (October 1, 1996, to September 30, 1997):

(1) Relocation units for families currently living in public housing (a) for which the HA has submitted a demolition/disposition application, or (b) subject to the distressed public housing conversion requirements of Section 202 of the Omnibus Consolidated Rescissions and Appropriations Act of 1996 (Pub. L. No. 104-134, approved April 26, 1996), hereafter referred to as distressed public housing conversion units;

(2) Replacement units in exchange for the recapture of unused public housing development funds (including major reconstruction of obsolete projects (MROP) or comprehensive improvement assistance program (CIAP) funds approved by HUD for conversion to development usage);

(3) Replacement units for (a) public housing approved by HUD for demolition/disposition, or (b) distressed public housing conversion units;

(4) Units for families currently living in a Section 23 leased housing project with an HA lease (or HAP contract if under the Section 23 housing assistance payments program) expiring during FY 1997;

(5) Units for the family unification program;

(6) Family self-sufficiency (FSS) service coordinators;

(7) Units for the relocation of witnesses involved in law enforcement and criminal prosecution;

(8) Units for persons with disabilities in support of designated public housing allocation plans and preferences for nonelderly disabled families in certain project-based Section 8 projects;

(9) Units for the mainstream program for persons with disabilities;

(10) Units for families currently living in HUD-owned, Section 8 project-based HAP contract termination, Section 8 project-based opt-out, and FHA-insured prepayment projects;

(11) Counseling to achieve broader housing opportunities;

(12) Units for litigation;

(13) Certificate and voucher renewals; and

(14) Certificate cost amendments.

HUD Notices

Optional Earned Income Exclusion/Deduction Incentive and Corrected Sample Format for Performance Funding System
Notice PIH 97-31 (HA) (June 25, 1997)

HUD has published two Notices regarding the calculation of Performance Funding System (PFS) Incentives for Other Income and for Housing Agencies (HAs) that adopt Optional Earned Income Exclusions/Deductions. The first was Notice 96-24, dated April 3, 1996, and the second was Notice 96-87, dated November 20, 1996. HUD has discovered two errors in the Earned Income Incentive part of the previously issued sample formats. This Notice corrects those errors and provides a separate "short form" format for the Other Income Incentive which was not incorrect in the earlier Notices.

The Notice goes on to explain that the Optional Earned Income Exclusions/Deductions provide HAs the opportunity to adopt incentives to encourage and support the efforts of working tenants. Housing authorities that adopt these optional exclusions will not automatically receive an increase in operating subsidies to offset any drop in rent collections caused by the optional exclusions. However, HUD has created an incentive by allowing HAs to keep any increased rent they collect as a result of their tenants' increased earned income, even though such increased rent would otherwise result in a decrease in operating subsidy. In order for HAs to qualify for this financial incentive, they must certify that they are making significant efforts to utilize the Optional Earned Income Exclusions/Deductions for existing residents and not solely taking actions regarding new admissions.

Questions and Answers Concerning Social Security (SS) and Supplemental Security Income (SSI) Verification
Notice PIH 97-32(HA) (June 26, 1997)

This Notice transmits a list of questions and answers concerning new procedures for verifying SS and SSI income. The issues covered are fairly technical and detailed, but for particular cases they may be quite helpful. PHA staff may contact HUD's SS/SSI Hotline at (202) 708-0099 if there are any further questions. Most likely advocates representing tenants may do the same.

Guidance on the Use of HOME Funds with HOPE VI and Public Housing Funds
Notice CPD 97-08 (June 30, 1997)

The purpose of this Notice is to provide guidance to HUD Field Offices, HOME Participating Jurisdictions (PJs), and public housing authorities (PHAs) regarding the use of HOME Investment Partnerships funds in conjunction with HOPE VI and public housing funds.

The Notice indicates that:

Under this Notice, HUD limits the renewal terms for Section 8 projects to 60 days. HUD's reason for such short terms is that Section 211(b)(4)(B) of the Fiscal Year 1997 Appropriations Act (Pub. L. No. 104-204, 110 Stat. 2874, approved Sept. 26, 1996) requires non-renewal of Section 8 project-based assistance contracts in certain circumstances. HUD is currently reviewing its Section 8 portfolio in order to determine which owners are to be denied renewal of their contracts as required by the law. This review process should be completed over the next few months. Since HUD is not yet able to identify those cases in which owners should be denied contract renewals, the renewal term for all expiring Section 8 contracts is set at 60 days. The 60-day term applies to both renewals under Section 221(b)(1) of the 1997 Act and new contracts entered into under Section 405(a) of the Balanced Budget Downpayment Act, I (Pub. L. No. 104-99, 110 Stat. 26, approved Jan. 26, 1996).

HUD claims authority to set such short renewal terms under Section 211(b)(1), which provides for renewals "for a period of not more than one year," and Section 405(a), which provides that the Secretary shall establish the terms and conditions in the contract. Nonetheless, the owners and their trade associations protested strongly against the short terms, claiming good owners were being made to suffer for the wrongdoing of the few bad owners.

Recertification for Residents Who Lose Income Due to the Contract with America Advancement Act of 1996 (Pub. L. No. 104-121) (Advancement Act), and the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Pub. L. No. 104-193) (Welfare Reform Act)
Notice H 97-41 (HUD) (July 18, 1997)

This Notice instructs owners/managers/agents and HUD's field office staff on the steps to take when a tenant loses income because of the Advancement Act and the Welfare Reform Act. In summary, the Notice provides that residents who lose income due to changes in Disability Income or SSI due to the Advancement Act, or SSI or AFDC/Temporary Assistance for Needy Families (TANF) due to the Welfare Reform Act must have their incomes recertified, their Section 8 payments recalculated and their rents reduced, following existing processes.

1. At http://www.access.gpo.gov/su_docs.
2. Call Aspen Systems at (301) 251-5395 to find out how to use HUD Clips.
3. To order Notices and Handbooks from HUD, call (800) 767-7468 or fax (202) 708-2313.