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Housing Choice Voucher Program FY 2006 Appropriations Implementation

This report presents the implementation of the Housing Choice Voucher Program for FY 2006 as appropriated by Public Law 109-115. It details funding calculations, adjustments, baselines, and renewal funding allocations. The report outlines the renewal funding process for public housing agencies, including adjustments for vouchers, costs associated with tenant protection, and HOPE VI vouchers. It also explains the pro-ration factor applied to ensure budget compliance and funds allocation.

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Housing Choice Voucher Program FY 2006 Appropriations Implementation

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  1. Housing Choice Voucher Program FY 2006 Appropriations Implementation • Presented by: U.S. Department of Housing and Urban Development -- Office of Housing Voucher Programs U.S. Department of Housing and Urban Development

  2. Housing Choice Voucher Program FY 2006 Appropriations Implementation Public Law 109-115, November 30,2005 Notice PIH 2006-05, January 13, 2006 U.S. Department of Housing and Urban Development

  3. Appropriated Renewal Funding • 2005 2006 • HAP Renewal Funding 13,462,989,000 14,089,755,725 • Less Set-Aside for Baseline • Adjustments * 45,000,000 • Less Congressionally- • Mandated Cut 107,047,242 140,447,557 • Net Appropriation for • Renewals, exluding • Set-Aside 13,355,941,758 13,904,308,168 • * Also subject to Congressional cut U.S. Department of Housing and Urban Development

  4. Appropriated Renewal Funding • CY 2006 net amount available for renewals, plus the set-aside, represents a gross increase of $592,916,410, and 4.439%, over the FY 2005 amount. U.S. Department of Housing and Urban Development

  5. Renewal Funding Calculations – 2006 Act • “…the Secretary for the calendar year 2006 funding cycle shall provide renewal funding for each public housing agency based on each public housing agency’s 2005 annual budget for renewal funding as calculated by HUD, prior to pro-rations, and by applying the 2006 Annual Adjustment Factor as established by the Secretary, and by making any necessary adjustments for the costs associated with the first-time renewal of tenant protection or HOPE VI vouchers or vouchers that were not in use U.S. Department of Housing and Urban Development

  6. Renewal Funding Calculations – 2006 Act • during the 12-month period in order to meet a commitment pursuant to section 8(o)(13) of the Act…The Secretary shall, to the extent necessary to stay within the amount provided under this paragraph, pro-rate each public housing agency’s allocation otherwise established.” U.S. Department of Housing and Urban Development

  7. Renewal Funding Calculations – 2006 Act • CY 2005 Baseline (per January 21, 2005 notifications) • Adjustments: • (1) Approved 2005 Funding Adjustments, due to funding errors identified in the quality assurance process following the notifications • (2) Funds for vouchers initially awarded in CY 2004 and renewed for a portion of CY 2005 in the 2005 baseline, ot bring baseline to 12 months for U.S. Department of Housing and Urban Development

  8. Renewal Funding Calculations – 2006 Act • (3) Funds for vouchers initially awarded in CY 2005, to provide funding to 12/31/2006 • (4) Baseline cost adjustments for transfers in or out of PHA inventory during CY 2005 • (5) Funds for the additional costs of enhanced vouchers, based on PIC data, above funding otherwise provided in the baseline • (6) Funds for additional costs of first-time renewal of HOPE VI vouchers, based on PIC data, above funding otherwise provided in the baseline U.S. Department of Housing and Urban Development

  9. Renewal Funding Calculations – 2006 Act • All the above adjustments were made to the 2005 baseline, and then the 2006 AAF was applied to establish the 2006 baseline. • Total baseline amounts for all PHAs were totaled and compared to the available appropriation to determine the pro-ration factor • Pro-ration factor was applied to each PHA’s CY 2006 baseline to determine the projected funding amount. U.S. Department of Housing and Urban Development

  10. Renewal Funding Calculations – 2006 Act U.S. Department of Housing and Urban Development

  11. Renewal Funding Calculations - Example • Partial Year Funding for 2004 New Vouchers: • PHA received new increment with term of 8/1/2004 to 7/31/2005, for 93 units, due to 2004 approved PH demolition under Section 18. • When 2005 base was calculated, renewal funds were provided for the term of 8/1/2005 to 12/31/2005; that amount carried forward in the 2005 base to 2006. • Calculations required to increase base for renewing the months of the initial term that were in CY 2005: 1/1/2005 to 7/31/2005 (these are not already in 2005 base) U.S. Department of Housing and Urban Development

  12. Renewal Funding Calculations - Example • Calculations: 2005 Funded PUC x • total units x months to fund = • $384.00 x 93 units x 7 months = $254,984 • $254,984 is added to the base U.S. Department of Housing and Urban Development

  13. Renewal Funding Calculations - Example • Partial Year Funding for 2005 New Vouchers: • PHA received new increment with term of 4/1/05 • to 3/31/06, for 64 units under Multifamily Tenant • Protection • PHA is funded for these units through 3/31/06 • Calculations are required to increase the base to • provide renewal funding for the months in CY • 2006 beyond 3/31/06 U.S. Department of Housing and Urban Development

  14. Renewal Funding Calculations - Example • Calculations: 2005 Funded PUC x total units x • months to fund = • $384.00 x 64 units x 9 months = $221,184 • $228,073 is added to the base • Note: Public Housing Relocation and Replacement • Vouchers are generally funded to December 31 • of the initial year U.S. Department of Housing and Urban Development

  15. Renewal Funding Calculations - Example • Funding for 2005 Transfers: • PHA received 10 units via transfer from a divesting • PHA on 7/1/2005 • Calculations are required to increase the base to • provide renewal funding for 12 months in 2006 • Calculations: 2005 Funded PUC of Divesting HA x • total units x 12 months = • $396.89 x 10 units x 12 months = $47,627 • $47,627 is added to the base of the receiving PHA • and deducted from the base of the divesting PHA U.S. Department of Housing and Urban Development

  16. Renewal Funding Calculations - Example • Funding for Enhanced Vouchers (EV): • PHA received Tenant Protection vouchers and has • reported 15 EVs in the current PIC database • Calculations are required to increase the base to • provide sufficient renewal funding for the 15 • reported Enhanced Vouchers • Calculations: Average reported cost in PIC for • Enhanced Vouchers • Less: PHA’s 2005 Funded PUC • Times: Enhanced Vouchers x 12 months in CY 2006 U.S. Department of Housing and Urban Development

  17. Renewal Funding Calculations - Example • Funding for Enhanced Vouchers: • PHAs average reported cost in PIC for 15 Enhanced Vouchers: $442.73 • PHA’s CY 2005 Funded PUC: $429.08 • Difference $ 13.65 •   $13.65 x 15 Enhanced Vouchers x • 12 months = $2,457 •  $2,457 is added to the base U.S. Department of Housing and Urban Development

  18. Renewal Funding Calculations - Example • Funding for Enhanced Vouchers: • If PHA has reported more Enhanced Vouchers in PIC than Tenant Protection Vouchers it has received, calculations are limited to the total TP Vouchers •   If PHA base was increased in CY 2005 for Enhanced Voucher cost, any additional increase in CY 2006 is limited to the total increase in the EV costs U.S. Department of Housing and Urban Development

  19. Renewal Funding Calculations - Example • Funding for 1st Time Renewal – HOPE VI Vouchers: • PHA received an award of Hope VI Vouchers, for the • term of 1/1/2005 to 12/31/2005, for 3 vouchers. • Calculations are required to increase the base for the additional costs associated with the first time renewal of these vouchers in CY 2006 • Calculations: Reported average cost in PIC for HOPE VI vouchers • Less: PHA’s Funded CY 2005 PUC • Times: HOPE VI vouchers in PIC x renewal months in CY 2006 U.S. Department of Housing and Urban Development

  20. Renewal Funding Calculations - Example • Funding for 1st Time Renewal – HOPE VI Vouchers: • PHAs average reported cost in PIC for 3 HOPE VI • Vouchers: $703.17 • PHA’s CY 2005 Funded PUC: $520.67 • Difference $182.50 • $13.65 x 3 Hope VI Vouchers x 12 months = $6,570 • $6,570 is added to the base U.S. Department of Housing and Urban Development

  21. Renewal Funding Calculations – Process • Projected Funding Letter has been issued to each PHA with an active voucher program • Attachment A details the calculation of the PHA’s projected HAP funding for 2006 • PHAs are asked to respond on two items if they appear incorrect • No other response is needed or requested – do not respond if there are no problems U.S. Department of Housing and Urban Development

  22. Renewal Funding Calculations – Process • PHA response to the projected funding letter must be sent by overnight delivery and received at the designated address by Tuesday, January 31 • ndo not use regular mail • ndo not send your response to HUD HQ or the field or the FMC •   HUD will review all responses and make any corrections to the data, as identified by PHAs and by HUD •   HUD will finalize CY 2006 funding calculations, issue final letters to all PHAs, and establish disbursements U.S. Department of Housing and Urban Development

  23. Renewal Funding Calculations – Process • PHAs are asked to request an adjustment on these two items if they are incorrect • (1)Funding Increment / unit changes from 2005 • --Determine if the new increments and • transferred vouchers are correct. • --If any are missing, provide documentation • --If any increments shown were not received, • provide that comment U.S. Department of Housing and Urban Development

  24. Renewal Funding Calculations – Process • (2)Fair Market Rent Area used to establish 2006 • Annual Adjustment Factor • -- Respond if the newly assigned FMR area is not • consistent with PHA jurisdiction • Note: FMR areas were revised for 2006; some have been combined and some eliminated; a change in FMR area is not necessarily an error U.S. Department of Housing and Urban Development

  25. Renewal Funding Calculations – Process • Requests for adjustments of the following items will not be considered: •  (1) VMS or year-end data used to establish the 2005 Baseline •  (2) PIC data used to calculate enhanced voucher or additional HOPE VI voucher funding •  (3) Annual Adjustment Factor established for a Fair Market Rent area U.S. Department of Housing and Urban Development

  26. Appropriated Admin Fee Funding • 2005 2006 • Administrative Fee Funding 1,210,107,000 1,250,000,000 • Less Set-Aside for • Special Fees 25,000,000 10,000,000 • Less Congressionally-Mandated • Cut 9,814,992 12,400,000 • Net Appropriation for Renewal • Fees 1,175,292,008 1,227,600,000 • FY 2006 net available for renewal fees represents an increase of $52,307,992, and 4.45%, over FY 2005. U.S. Department of Housing and Urban Development

  27. Admin Fee Funding Calculations- 2006 Act • “…$1,240,000,000 of the amount provided in this paragraph shall be allocated for the calendar year 2006 funding cycle on a pro-rata basis to public housing agencies based on the amount public housing agencies were eligible to receive in calendar year 2005.” U.S. Department of Housing and Urban Development

  28. Admin Fee Funding Calculations- 2006 Act •  CY 2005 Baseline • (per January 21, 2005 notifications) •  Adjustments: • (1)Approved 2005 Funding Adjustments, due to funding errors identified in the quality assurance process following the January 21, 2005 notifications • (2)Fees required for vouchers initially awarded in CY 2004 and renewed for a portion of CY 2005 in the 2005 baseline, to bring baseline to12 months for 2006 U.S. Department of Housing and Urban Development

  29. Admin Fee Funding Calculations- 2006 Act • (3) Fees required for vouchers initially awarded in CY 2005, to provide funding to 12/31/2006 • (4) Fee adjustments for transfers in or out of PHA inventory during CY 2005 • All the above adjustments were made to the 2005 baseline to establish the 2006 baseline U.S. Department of Housing and Urban Development

  30. Admin Fee Funding Calculations- 2006 Act • Total baseline amounts for all PHAs were totaled and compared to available appropriation to determine the pro-ration factor. • Pro-ration factor was applied to each PHA’s 2006 baseline to determine the funding amount U.S. Department of Housing and Urban Development

  31. 2005 Baseline 3,450,000 Approved Adjustment 2,400 Partial Year Fees for 2004 New Vouchers 28,156 Partial Year Fees for 2005 New Vouchers 24,912 Fees for Transfers 4,687 2006 Baseline 3,510,155 Pro-ration Factor 1.00797 2006 Funding Amount 3,538,130 Admin Fee Funding Calculations- 2006 Act U.S. Department of Housing and Urban Development

  32. Admin Fee Funding Calculations-Example • Partial Year Fees for 2004 New Vouchers • PHA received new increment with term of 8/1/2004 to 7/31/2005, for 93 units. • When 2005 base was calculated, renewal fees were provided for the term of 8/1/3005 to 12/31/2005; that amount carried forward in the 2005 base to 2006. U.S. Department of Housing and Urban Development

  33. Admin Fee Funding Calculations- Example • Calculations required to increase fee base for renewing the months of the initial term that were in CY 2005: 1/1/2005 to 7/31/2005 (these are not already in 2005 base) • Calculations: per unit fee rate x total units x months to fund = • $43.25 x 93 units x 7 months = $28,156 • $28,156 is added to the base U.S. Department of Housing and Urban Development

  34. Admin Fee Funding Calculations- Example Partial Year Fees for 2005 New Vouchers: PHA received new increment with term of 4/1/05 to 3/31/06, for 64 units PHA is funded for fees for these units through 3/31/06 Calculations are required to increase the fee base to provide renewal fees for the months in CY 2006 beyond 3/31/06 U.S. Department of Housing and Urban Development

  35. Admin Fee Funding Calculations- Example • Calculations: Per unit fee rate x total units x months to fund • = $43.25 x 64 units x 9 months = $24,912 • $24,912 is added to the base U.S. Department of Housing and Urban Development

  36. Admin Fee Funding Calculations- Example • PHA received 10 units via transfer from a divesting PHA on 7/1/2005 • Calculations are required to increase the fee base to provide renewal fees for 12 months in 2006 • Calculations: 2005 Fee Rate of Divesting HA x total units x 12 months = • $39.06 x 10 units x 12 months = $4,687 • $46.87 is added to the fee base of the receiving PHA and deducted from the fee base of the divesting PHA U.S. Department of Housing and Urban Development

  37. Admin Fee Funding Calculations- Process • Projected Funding Letter issued to each PHA with active voucher programs • Attachment details the calculation of the PHA’s projected administrative fee funding for 2006 • No response is needed or requested – if problems with new increments or transfers are reported using Attachment A, fee calculations will be corrected and properly reflected in the PHA’s final funding letter U.S. Department of Housing and Urban Development

  38. Administrative Fee Set-Aside • The 2006 Appropriations Act provides for an admin fee set-aside. •  “…up to $10,000,000 (of the $1.25 billion fee appropriation) shall be available to the Secretary to allocate to public housing agencies that need additional funds to administer their Section 8 programs.” • HUD has determined to apply these funds as follows: •   $2,000,000 Homeownership Fees • $8,000,000 Tenant Protection Admin Fees U.S. Department of Housing and Urban Development

  39. Administrative Fee Set-Aside • Homeownership Fees: •   --$1,000 fee for each homeownership closing during CY 2006 as reported in PIC • --Applies to families participating in the homeownership voucher program,Section 8 Family Self-Sufficiency Program, or the Moving to Work Program • --The one-time fee of $5,000 to a PHA for implementing a homeownership program will not be funded in CY 2006 U.S. Department of Housing and Urban Development

  40. Administrative Fee Set-Aside • Tenant Protection Fees: • --Administrative fees will be provided only for occupied units in the affected project at the time of PHA application for voucher funding • --One-time special fee will be $100 per voucher • -- Administrative and special fees will be provided until the funding is depleted •  The $10,000,000 set-aside is subject to the Congressionally-mandated 1 percent reduction U.S. Department of Housing and Urban Development

  41. Set-Aside for Baseline Adjustments • The 2006 Appropriations Act provides for a set-aside from the renewal account: •  “…up to $45,000,000 shall be available only: (1) to adjust the allocations for public housing agencies, after application for an adjustment by a public housing agency and verification by HUD, whose allocations under this heading for contract renewals for the calendar year 2005 funding cycle were based on verified VMS leasing and cost data averaged for the months of May, June and July of 2004 and solely because of temporarily low leasing levels during such 3-month period did not accurately reflect leasing levels U.S. Department of Housing and Urban Development

  42. Set-Aside for Baseline Adjustments • and costs for the 2004 fiscal year of the agencies; and (2(for adjustments for public housing agencies that experienced a significant increase, as determined by the Secretary, in renewal costs resulting from unforeseen circumstances or from the portability under section 8(r) of the United States Housing Act of 1937 of tenant based rental assistance.” U.S. Department of Housing and Urban Development

  43. Set-Aside for Baseline Adjustments • The $45,000,000 set-aside is subject to the Congressionally-mandated 1 percent reduction • PHAs will be considered for these funds based only on requests received by HUD no later than Tuesday, January 31, 2006, per the instructions of Notice PIH 2006-05. • HUD will process all requests under the first proviso first; once eligible requests are funded, HUD will process requests under the second proviso U.S. Department of Housing and Urban Development

  44. Set-Aside for Baseline Adjustments • Proviso 1: Temporarily low leasing levels in the May to • July 2004 base period: • HUD will compare each HA’s validated VMS data for May to July 2004 to the HA’s FY 2004 leasing data to determine if leasing for the May to July 2004 period was lower than the average for HA FY 2004 • If the May to July 2004 leasing was lower than the FY 2004 average leasing, the HA’s baseline will be increased for the additional units and the additional funds will be provided from the set-aside. U.S. Department of Housing and Urban Development

  45. Set-Aside for Baseline Adjustments • HUD will not accept revisions to the May to July 2004 baseline VMS data nor to the HA FY 2004 settlement data for purposes of processing a request under this proviso. • If eligible HA requests exceed the funds available, HUD may pro-rate the available funds. U.S. Department of Housing and Urban Development

  46. Set-Aside for Baseline Adjustments • Proviso 1 Example: • PHA ACC units: 250 • PHA average leasing, May to July 2004: 190 • PHA leasing, FY 2004: 2448 • Monthly average: 204 • Adjustment: 14 units x 12 months x $384 PUC = $64,512 • Adjustment funding will be calculated on the basis of the CY 2006 funded per unit amount U.S. Department of Housing and Urban Development

  47. Set-Aside for Baseline Adjustments • Proviso 2: Significant increase in renewal costs due to unforeseen circumstances or portability • To request a baseline increase due to unforeseen circumstances, a PHA must specify the circumstances and submit evidence that its CY 2006 allocation will not suffice to maintain its CY 2005 leasing levels. U.S. Department of Housing and Urban Development

  48. Set-Aside for Baseline Adjustments • Proviso 2 Example (Unforeseen Circumstances) • A PHA had set its Payment Standards at 90% of FMR in CY 2005 and maintained full lease-up at that level. Due to a hurricane, rents increased due to demand for housing in its jurisdiction, significantly and quickly, causing the PHA to raise its Payment Standards to 110 % of FMR in order to maintain viability for its program and participants. •   The PHA should submit documentation of the circumstances and calculations of the impact on its CY 2006 costs. U.S. Department of Housing and Urban Development

  49. Set-Aside for Baseline Adjustments • Proviso 2 Example (Portability) • For requests for increases due to portability, HUD will compare a PHA’s portability costs, as reported in PIC, to the PHA’s baseline per unit funding amount for CY 2006 to determine if the PHA is incurring significant cost increases due to portability • PHA should submit no documentation U.S. Department of Housing and Urban Development

  50. Set-Aside for Baseline Adjustments • PHA CY 2006 Renewal Funding PUC: $550 • Total portable households in PHA’s current • PIC data: 20 • Average Total HAP and Utility Reimbursement • for portable households per current PIC • data $625 • Baseline Adjustment for 2006: $18,000 • (20 units x $75 x 12 months) U.S. Department of Housing and Urban Development

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