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HUD Issues Final Rule on Project-Based Voucher Program

Today, HUD issued the final rule revising the regulations governing the Project-Based Voucher (PBV) Program at 24 CFR Part 983 (70 FR 59892). The final rule implements statutory changes contained in the Quality Housing and Work Responsibility Act of 1998 and the FY 2001 Appropriations Act to the program. It also responds to public comments to the proposed rule published on March 18, 2004.

10/13/2005

Open PDF: HUD Issues Final Rule on Project-Based Voucher Program

Three important revisions in the final rule, which were the focus of comments from the industry, are noted below:

1. The rule addresses the manner in which a public housing agency (PHA) shall select proposals submitted by owners for a PBV contract, and in particular the competitive selection of proposals. The final rule makes clear that the PHA may select without further competition a proposal for housing that already has been selected for assistance pursuant to a government program that required competitive selection of proposals. The earlier competitive selection cannot have considered the possibility of future PBV assistance. If the PHA is not selecting a proposal that has already undergone competitive selection for another federal, state, or local program, the PHA’s selection process must be in accordance with the selection procedures established in the PHA’s administrative plan.
2. No more than twenty-five percent of units in a project may receive PBV assistance with the exception of projects for the elderly, persons with disabilities, or families receiving supportive services. The proposed rule defined the supportive services exception solely in the context of the Family Self-Sufficiency Program. Industry comments urged HUD to grant discretion to PHAs to define what constitutes “supportive services” for the purposes of the exception to the twenty-five percent limitation for projects with families receiving supportive services. HUD accepted these comments, and in the final rule agreed with the industry view that a PHA may define in its administrative plan the definition of “supportive services.”
3. With respect to extension of the PBV contract term beyond the initial ten-year contract term, HUD only addressed a portion of the concerns raised with respect to limitations contained in the proposed rule. The final rule gives PHAs the discretion to extend the term of the contract for an additional period of up to five years, not to exceed an aggregate total term of fifteen years. However, the final rule continues to provide for this extension to be granted “within one year before expiration.” Most tax credit investors want an assurance up front that the PBV contract will be extended for at least an additional five years after the initial ten-year term.

In many areas the final rule has taken the approach of giving the PHAs more discretion in the implementation of the PBV program, consistent with the industry comments on the proposed rule. The full text of the final rule may be found at the following URL: http://a257.g.akamaitech.net/7/257/2422/01jan20051800
/edocket.access.gpo.gov/2005/pdf/05-20035.pdf.

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