Understanding Tenant Based Rental Assistance Presented By: Candace Baldwin NCB Capital Impact &

1. Understanding Tenant Based Rental Assistance Presented By: Candace Baldwin NCB Capital Impact & Brenda Hampton Illinois Department of Human Services

2. Agenda • Introduction of Speakers • Discussion Points • Current development subsidies do not “drill down” to income levels of MFP participants • Housing Choice Voucher (a.k.a. Section 8) are over subscribed and not readily available • Alternative sources of funding for rental assistance that could be utilized • States have implemented bridge rental subsidy programs linked to Housing Choice Voucher • Open Discussion

3. Development subsidies do not create affordable housing for MFP population • Traditional affordable housing finance tools do not drill rents down far enough to meet MFP participant’s level of income • Housing Choice Vouchers (HCV) are over-subscribed • Tenant based rental assistance is needed to make rents affordable for community integration

4. Tenant Based Rental Assistance (TBRA) is derived based upon recipient’s income • No more than 30% of resident’s income • Like vouchers, tenant based rental assistance programs fill the gap • “Gap” is difference between 30% of resident’s income and fair market rent (FMR) • FMR* set annually by HUD based upon local markets *For more information on how to find the fair market rent for local area visit: http://www.huduser.org/datasets/fmr/fmr2008f/FY2008_FMR_SCHEDULEB.pdf

5. There are a number of Alternative Sources for TBRA • Tenant based rental assistance can be sourced from: • HOME funds • Housing Trust Funds • Typically locally controlled • Follow similar eligibility guidelines as housing choice vouchers

6. HOME funds are Typically Overlooked as a Source for Rental Assistance • HOME funds are administered through a participating jurisdiction (PJs) • State or local government designated by HUD to administer HOME funds • Small cities and counties are administered by State HFA • Rental housing units must meet HUD qualification • Length of rental assistance contract set by program guidelines

7. HOME funds can Assist in Transitioning MFP participants into the Community • Uses for HOME funds can cover: • Housing costs such as rent • Utility costs and/or deposits • Security deposits • Limited to tenants with incomes at or below 80 percent of area median income • Participating jurisdiction has to include TBRA as an activity in consolidated plan • Contracts for two years and are renewable

8. Housing Trust Funds can also be Used for Rental Assistance • Trust funds can be administered by state or local governments • 38 state housing trust funds in the U.S. • Funded through fees assessed – e.g. real estate transfer tax, document recording fees, application fees • Not subject to federal regulations – leads to flexibility of eligible uses

9. A Number of States use Housing Trust Funds for Rental Assistance • Minnesota Housing Trust Fund • Established in 1988 • 2002 expanded use of funds for rental assistance • Funds administered through designated agencies and organizations through RFP process • Oregon Low Income Rental Assistance • Department of Housing and Community Development • Referrals through community partner organizations

10. HOME and Trust Funds face similar challenges to HCV • Funding for both programs subject to availability of funds annually • Annualized payment creates a long term funding commitment rather than one time development subsidy • Not all HOME or Trust Funds are designated for tenant based rental assistance

11. Expanding use of TBRA funds for MFP Participants Requires Outreach • HOME Funds • Contact PJ and state HFA to discern if TBRA is use of program • Consolidated Plan updates – public process • Request prioritization of funds to be directed to MFP initiative • Housing Trust Funds • Similar strategy to HOME funds • Identify innovative sources of funds to increase trust fund appropriation

12. Bridge Rental Subsidy Programs can also be tied to more than just Vouchers • Number of states have employed bridge rental subsidy programs • Iowa HCBS Bridge Rental Subsidy Program • Maryland Bridge Rental Subsidy Program • Focused on participant securing housing choice voucher • May consider allowing TBRA through HOME or Trust Funds to be the transition to permanent rental assistance

13. For more information Candace Baldwin Senior Policy Advisor NCB Capital Impact cbaldwin@ncbcapitalimpact.org 703-647-2352

14. MFP PresentationOctober 8, 2008

15. Illinois Department of Human Services/Division of Mental Health Permanent Supportive Housing and Bridge Subsidy Program

16. Participating partners: • Technical Assistance Collaborative, Inc. (TAC), Boston, MA • Corporation for Supportive Housing (CSH), Chicago, IL • Illinois Housing Development Authority (IHDA) • Pubic Housing Authorities (contractual agreement) • Regional Housing Support Facilitators

17. Permanent Supportive Housing Housing Policy (PSH) Statement: • The Department of Human Services, Division of Mental Health is committed to, as a priority toward systems rebalancing, the development and expansion of Permanent Supportive Housing (PSH) for individuals who meet defined criteria of eligibility and who are diagnosed with a serious mental illness.

18. Permanent Supportive Housing Housing Policy Statement (cont): • The goal of this initiative is to promote and stabilize consumer Recovery with elective support services in one’s leased or owned home that (1) provides safety ; (2) ensures comfort and decency ; (3) is financially manageable within resources that the consumer has available.

19. Illinois - PSH model: • Typically rental apartments linked with flexible community-based support services: • Self contained unit (bathroom & kitchen) • Scattered sites • Studio or efficiency units • one bedroom apartments • two bedroom shared apartment

20. Illinois - PSH model (cont) • Sites with three or more unrelated individuals are considered as Group Homes • Group Homes will not qualify as acceptable residential options under the PSH model .

21. Illinois - PSH model (cont) • Services are linked to housing, but are considered voluntary. • Services are not a contingency to retain housing. • Housing is considered permanent. • Landlord/tenant law governs. • Tenant hold the lease, sublease or rental agreement.

22. Illinois - PSH model (cont) • Tenant controls access to his or her dwelling unit in accordance with applicable landlord/tenant law. • Tenant-based rental assistance dollars (one-time) available to eligible/approved DMH consumers - Bridge Subsidy Program*

23. Support Services: • The full array of DMH Support Services are available based on medical necessity. • Support Services are flexible based on consumer choice. • Community mental health engagement is a requirement in the PSH referral and application processes. • Community providers have an expectation to continue outreach to consumers in PSH.

24. PSH priority population • Residents of Long Term Care (nursing homes-NF) • Extended care patients of State Psychiatric Hospitals • Individuals at risk of placement in a NF • Aging out young adults (DCFS wards or Individual Care Grant ) • Residents of existing DMH contracted Supervised or Supported Residential settings.

25. PSH Eligibility Criteria • Diagnosis of Serious Mental Illness. • Income within 30% or below Area Medium Income (AMI). • Referred and approved by a DMH contracted vendor through outlined processes.

26. PSH - Bridge Subsidy Program • Financing - $7.5 million dollars over five years were allocated by State legislative appropriation (Hospital Tax_Lock Box) to develop opportunities for eligible/identified individuals to transition to affordable community-living alternatives.

27. Bridge Subsidy Program . . . • Requires income at or below 30% Medium Area Income. • Pays 70% of the rental cost - applied to the lease. • Requires that the consumer pay 30% of his/her income - applied to the lease (if a consumer has no income, Bridge will cover 100% cost).

28. Bridge Subsidy Program . . • Requires that all individuals approved for Bridge either apply for a Section 8 Voucher or other rental programs or get on a waiting list for a rental voucher. • Rental cost is calculated against the Fair Market Rental rate, by county (rental units cannot exceed this amount). • Includes a $2,000 one time Transition Fund, (maximum $2,800 for a lifetime).

29. Bridge Subsidy Administration • DMH has contracted with (at least one) Local Housing Authority in each Region to serve as a Subsidy Administrator (SA) • Two contracts are with entities that have subsidy administration experience: one of the two will serve as a SA in all areas of the state without a contracted HA. • SA will conduct initial Housing Quality

30. Bridge Subsidy Administration standard unit inspections according to HUD specifications. • SA will assist as a resource with landlord search. • SA will certify consumer income. • SA will respond to Request to Lease. • SA will negotiate unit rental price that meets HUDs rent reasonableness test.

31. Bridge Subsidy Administration • SA will conduct initial income certification. • SA will execute Housing Assistance Payment (HAP) contract with landlord. • SA will pay security deposit, utility deposit and monthly rent according to the BHAP. • SA will conduct annual income recertification. • SA will submit monthly reports and quarterly fiscal reconciliation to DMH.

32. Transition Fund Requisition Forms A&B (attachments) • One SA will process Transition Fund request (Form B) for household purchases for the entire state. • Transition Form - Instructions • Transition Form A - Used by SA for identification of payment for security deposit, utility deposit and reimbursement fees. • Transition Form B - Used by care managers to access a ‘bank card’ for consumer household purchases.