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Office of Housing Voucher Programs Implementation of 2011 Appropriations

This broadcast provides an overview of the provisions of the 2011 Appropriations Act for the Housing Choice Voucher Program, including funding allocations and requirements for additional funding. It also discusses the process for renewals, incrementals, and administrative fees.

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Office of Housing Voucher Programs Implementation of 2011 Appropriations

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  1. Office of Housing Voucher Programs Implementation of 2011 Appropriations Housing Choice Voucher Program June 6, 2011

  2. Purpose of This Broadcast • Review the provisions of the 2011 Appropriations Act – renewals, incrementals, administrative fees • Explain the CY 2011 Housing Choice Voucher Program funding allocations • Identify the requirements for PHA requests for additional funding under the HAP Set-Aside

  3. CY 2011 HAP and Admin Fee Funding • Public Law 112-10 enacted April 15, 2011 • URL: http//thomas.loc.gov/home/approp/app11.html • funded via 6 Continuing Resolutions before the law was passed: • Provided funding at 2010 appropriated level • Continued 2010 appropriations requirements • January thru June disbursements equaled 1/12 of CY 2010 eligibility and set-aside plus funds for first time renewals l

  4. HAP Funding – Appropriations

  5. HAP Funding – Provisions • Basic Funding Eligibility Components • FFY 2010 actual verified HAP Costs from VMS • Adjustments for HAP Costs for first time renewals, to fund a total of 12 months • Allowance for Family Self-Sufficiency escrow deposits • Application of Renewal Funding Annual Adjustment Factor

  6. HAP Funding – Provisions Basic Funding Eligibility Components • Adjustment for Transfers to or from the PHA • Eligibility for DHAP to HCV and THU to HCV Voucher Renewals • VASH Renewals • Application of national pro-ration factor

  7. HAP Funding - Provisions • Re-benchmarking, based on FFY 2010 validated cost data from VMS • October 2009 thru September 2010 • Including all categories of HAP Expense except 5 Year Mainstream • Including expenses for VASH vouchers leased • Including total HAP expenses for contracts effective after the first of the month

  8. HAP Funding - Provisions • Deduction for over-leased unit months • Including funding for disaster vouchers expired 12/31/2010

  9. HAP Funding – Provisions • VMS Data Integrity Efforts • To ensure HUD uses the final, accurate FFY 2010 HAP costs for every PHA • PHAs were advised of the deadline for submitting all data and data changes to VMS for FFY 2010 and Oct thru Dec 2010 – April 25 – for use in renewal and set-aside calculations • Data sustained the regular on-line edits and was reviewed off line at the FMC

  10. HAP Funding – Provisions • VMS Data Integrity Efforts • Database further reviewed at HQ by identifying missing items and monthly entries out of range for each PHA’s norm - reasonableness • FMC contacted PHAs with questionable or missing data to resolve all issues • Database finalized for CY 2011 funding calculations

  11. HAP Funding – Provisions • VMS Data Integrity Efforts: • No further data changes considered unless directed by HUD • No further data extracts from VMS • PHAs should still update data as needed, but base for CY 2011 funding will not be changed

  12. HAP Funding - Process • April 25 reviewed data is the starting point • Adjustments for 1st time renewal of HOPE VI, tenant protection and incremental vouchers • To provide funding through 12/31/2011 for vouchers that are not represented for 12 months in the VMS data • First time renewal funding consists of initial funding, lease-up period, actual costs from VMS, and additional months required • Lease-up and additional months funding provided at the higher of the initial funding rate or VMS FFY 2010 average per unit cost

  13. HAP Funding – Process • Example: TP increment with initial term April 1, 2010 thru March 31, 2011 • 2011 funding will consist of: • Original Funding 1/11 thru 3/11 3 mo • Funding based on VMS data for 7/10 to 9/10 included in re-benchmarking 3 mo -- Funding to cover lease-up period of 4/10 thru 6/10, not assumed in VMS 3 mo -- Funding for total months not covered above 3 mo

  14. HAP Funding - Process • Adjustment for deposits to participants’ FSS escrow accounts (1 of 2 provisions) • Data from PIC – participants and monthly deposit amounts • Based on October thru December 2010 new accounts, with December deposits used as the base for the 12 months to be funded • Used both active and historical PIC data • Prior escrows (FFY 2010) are already in the re-benchmarking expenses via VMS reporting

  15. HAP Funding - Process • 2011 Renewal Funding AAF applied • Renewal Funding AAFs published and posted • Two AAF tables this year • Applied an inflation factor to the AAF to account for time lag between end of re-benchmarking period on 9/30/10 and start of funding period on 1/1/11

  16. HAP Funding Process • Adjustment for Transfers In or Out • Factored after application of AAF to ensure AAF of initial PHA is applied to its costs • Divesting PHA’s VMS costs within FFY 2010 and prior to the transfer are added to Receiving PHA’s VMS costs

  17. HAP Funding - Process • Addition of DHAP to HCV Vouchers Renewal from CY 2010 • Converted to regular Vouchers for CY 2010; no adjustment needed or made for CY 2011 • Addition of DHAP to HCV Vouchers Renewal from CY 2011 • Only for voucher issued prior to 1/1/2010 and initial leased prior to May 2010 • Renewal eligibility based on each PHA’s December 2010 leasing of these vouchers

  18. HAP Funding - Process • Renewal per unit funding based on higher of reported costs for these vouchers or the PHA’s program-wide FFY 2010 HAP costs • Addition of THU to HCV Vouchers Renewal • Funded through 12/31/2010 and then renewed as regular vouchers • Renewal eligibility based on each PHA’s December 2010 leasing of these vouchers • Renewal per unit funding based on higher of reported costs for these vouchers or the PHA’s program-wide FFY 2010 HAP costs

  19. HAP Funding - Process • Result of these calculations is PHA’s 2011 renewal eligibility • Based on the total national eligibility and appropriated amount, a pro-ration factor will be set and applied to all PHAs’ eligibility to determine pro-rated eligibility, which is the funding amount – downward pro-ration is expected to be minimal • 2011 Appropriations Act does not provide for an NRA offset, and none was taken

  20. HAP Funding - Process • MTW Agencies • Funded per the terms of the PHAs’ individual agreements • Pro-rated at same percentage as all other PHAs • Per 2011 Act, MTW agencies may use appropriated funds to lease vouchers in excess of baseline, but will not be funded for the excess leasing

  21. HAP Funding - Process • 60 day completion requirement per appropriations act • Detailed funding allocation calculations will be provided to each PHA with an explanation of each step • Allocation Letter • Calculations • Notes explaining each data item in the calculations

  22. HAP Funding - Process • Key Points • Letter references Appropriations Act Implementation notice – expected to be issued by June 6, 2011 as PIH Notice 2011-27; posted on HUD web • Letter identifies total funding • Costs will not be updated for eligibility calculation except at HUD direction

  23. HAP Funding - Process • Key Points: • Appropriated HAP funds may not be used to support leasing above baseline • Appropriated HAP funds may not be used for any other purposes • Administrative fees will be earned based on PHA leasing • Set-aside funding will be processed in accordance with details in the Notice

  24. HAP Funding - Process • Disbursements for January thru June 2011 were based on 1/12 of CY 2010 eligibility plus set-aside award and monthly renewal amounts needed for new units • Front load funding has been provided as needed, if a PHA has insufficient funds (BA and NRA) to support present HAP contracts • Front load funding is an advance disbursement of CY 2011 eligibility, not additional eligibility

  25. HAP Funding - Process • Based on established allocations – • Under-disbursements through June will be made up in an additional payment in July • Excess disbursements will be recouped evenly across the remaining 6 months of CY 2011 (July thru December) • Disbursements are even monthly, even though they include first time renewal of increments expiring during CY 2011

  26. HAP Funding - Process Renewal Funding per FFY 2010 VMS: $ 24,000,000 First Time Renewal Funding for 9/30/2011 Expiration: $ 1,200,000 Total Funding: $ 25,200,000 Total Advances January to June 2011: $ 11,400,000 Total Due PHA January to June 2011: $ 12,600,000 Make-Up Disbursement: $ 1,200,000 Remainder due PHA: $ 12,600,000 Disbursements July to December 2011: $ 2,100,000 True Need Monthly for Jan to Sept: $ 2,000,000 True Need Monthly for Oct to Dec: $ 2,400,000

  27. HAP Set-Aside • Expanded in CY 2009 thru CY 2011 to reduce impact on the renewal formula • Eligible Uses are the same as in 2010: • To adjust allocations for PHAs that experienced a significant increase in renewal costs, resulting from unforeseen circumstances or portability under section 8(r)

  28. HAP Set-Aside • To adjust allocations for PHAs with leasing rates at the end of CY 2011 that exceed the average leasing for the 12-month re-benchmarking period • To adjust for costs associated with VASH vouchers • To adjust for vouchers not in use during the 12 months in order to be available to meet a commitment under section 8(o)(13) – project-based vouchers

  29. HAP Set-Aside • Exact procedures and application formats are provided in Notice PIH 2011-27 • Applications are due to HUD HQ by 5:00 pm on June 23, 2011 • Overnight (tracked) mail recommended • E-mails and faxes not acceptable • Do not submit to FMC or field office • PHAs are required to apply for each category for which they want consideration and provide the documentation required

  30. HAP Set-Aside Unforeseen Circumstances – PHA must submit: • Attachment A from Notice 2011-27 • Written justification • Evidence to support justification • PHA calculation of the 2011 increased cost Portability – PHA must submit: • Attachment A • No other documentation required – HUD will determine eligibility based on VMS data • Eligibility for average port paid cost in excess of 110% program-wide average cost

  31. HAP Set-Aside • Additional Leasing – PHA must submit: • Attachment A • No other documentation required – HUD will determine eligibility based on leasing per VMS • HUD VASH • Attachment A • Evidence that 2011 anticipated VASH HAP costs exceed VASH funds (provide calculation of costs that exceed available funding)

  32. HAP Set-Aside • Project Based Vouchers – PHA must submit: • Attachment A • Attachment B for each project • Executed AHAPs • Executed HAPs or statement by PHA that none have been executed yet

  33. HAP Set-Aside • General Issues from Prior Years: • Failure to provide signed Attachment A or B • Failure to mark on Attachment A the category(ies) for which the PHA is applying • Incorrect PHA number on Attachment A or B • Submissions received after the deadline

  34. HAP Set-Aside • Issues for Unforeseen Circumstances: • PHA failed to provide a direct link between the U/C and how it impacted the PHA’s HCV program costs • PHA failed to provide the calculated amount needed and/or did not provide documentation to support the calculated amount

  35. HAP Set-Aside – U/C Example • PHAs that have experienced significant cost increases due to an unforeseeable rise in rental costs above that increase anticipated by the Renewal Funding AAFs provided by HUD; documentation could include: • Evidence of increased rents • Identification of affected contracts in the PHA’s HCV program • Calculation of the increased cost required

  36. HAP Set-Aside – U/C Example • PHAs experiencing an increase in HAP per unit cost (PUC) in comparison to the pro-rated funded HAP PUC for CY 2011, due to economic conditions resulting in decreased total tenant payments; documentation could include: • Actual per unit tenant payments and HAP costs experienced by the PHA in CY 2011 • Calculation of increased cost required

  37. HAP Set-Aside • Issues for Project Based Vouchers: • PHA failed to provide signed AHAP/HAP in its entirety (including exhibits) to support the number of unit withheld due to the commitment • PHA failed to provide Attachment B with the number of vouchers held from leasing each month for the specific PB commitment • PHA failed to provide separate Attachment B and documents for each project-based commitment

  38. HAP Set-Aside • Issues for Project Based Vouchers: • PHA requested funding for an existing housing project based commitment, which is not eligible since there is no reason to withhold vouchers from leasing

  39. HAP Set-Aside • All complete and timely applications will be reviewed for eligibility and to determine eligible funding amounts • Excess NRA funds will be applied to eligibility, to ensure set-aside funds are used where they are eligible and needed • If eligible requests exceed funds available, some or all categories will be pro-rated • Process will be completed as quickly as possible

  40. HAP – Use of Funds • 2011 HAP funds, same as 2005 thru 2010, may only be used for eligible HAP expenses for unit months up to baseline • Rental or homeownership subsidy payments • Utility reimbursements • FSS escrow deposits

  41. HAP – Use of Funds • Eligible uses are the same as when HUD held excess funds in the program reserve • Only difference: where the funds are held – PHA – and they can be used for eligible costs without requesting HUD approval • Any portion remaining at year’s end must be deposited to the NRA

  42. HAP – Use of Funds • Interest earned on investment of NRA funds accrues as program receipts – belongs to the program • HAP and NRA funds may not be used for prior year deficits or any other purpose, including • Administrative costs • Public housing expenses • Other housing expenses

  43. HAP – Use of Funds • Any funds which have been used for other purposes or transferred out of the NRA must be returned – no exceptions • PHAs that have diverted funds may be subject to administrative fee sanctions or other actions • HUD’s calculation of NRA balances assumes all HAP funds provided were used for eligible HAP purposes and reported in VMS or are in the NRA

  44. Tenant Protection Funds - Provisions • $109,780,000 for all purposes • Eligible for PH demolition/disposition, multifamily conversions, Mod Rehab replacements; Section 202 re-financing • Vouchers provided for all units occupied during previous 24 months that cease to be available as assisted housing

  45. Admin Fee Funding – Appropriations

  46. Administrative Fee Funding - Provisions • Fees based on provisions of section 8(q) of the Act, as it existed immediately prior to QHWRA • Same provisions as in 2010 – fee eligibility based on first of month leasing for all vouchers and on 2011 fee rates • For 2011, no separate fee rates (Column C) for PHA owned units – will be calculated the same as fees for all other Voucher leasing

  47. Administrative Fee Funding - Provisions Fee rate schedules are posted at: http://www/hud/gov/offices/pih/programs/hcv/adminfees2011.cfm Fees will be pro-rated as needed to stay within appropriation; reconciled based on using 1/12 of appropriated funds monthly Fee provisions apply to all vouchers – renewal, incremental, tenant protection, VASH

  48. Administrative Fee Funding – Process • Fees advanced CY 2011 to date based on latest reconciled VMS data when funds were issued – Jan thru May at 92%; June at 80% • Fees advanced do not equal eligibility or fees earned – just an estimate • Fees will continue to be advanced based on leasing data – as it updates • Fees will be reconciled monthly as actual leasing data is updated

  49. Administrative Fee Funding - Process • Average reconciled pro-ration for CY 2011 expected to be approximately 83% • Fee set-aside will be used for: • Homeownership incentive fees • One time special fees for Housing conversion tenant protection actions ($200 per occupied unit) • Program specific audits as required • PHAs in need of additional funds to administer their program (remainder)

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