HUD updates CARES Act waivers for Public and Indian Housing programs, including Section 8

July 07, 2020

Affordable Housing Alert

Author(s): Deborah VanAmerongen, Kathie Soroka

HUD has updated and extended CARES Act waivers for HUD’s Public and Indian Housing programs. These waivers provide alternative requirements for Housing Quality Standards (HQS) inspections of Section 8 Voucher units, resident income re-certifications, and other requirements.

On April 10, 2020, HUD published Notice PIH 2020-05 utilizing authority under the CARES Act to establish waivers and administrative flexibilities to provide relief to Public Housing Agencies (PHAs), Indian tribes, and tribally designated housing entities (TDHEs) in response to the COVID-19 pandemic. In this revision to that Notice, HUD restates the waivers and alternative requirements established in Notice PIH 2020-05, provides additional waivers and alternative requirements, extends the periods of availability for previously established waivers and alternative requirements, and issues technical amendments to several of the previously established waivers and alternative requirements.

PHAs, Indian tribes, and TDHEs can choose to implement any or all of these waivers, immediately or at any point during the relevant applicability period. HUD has also waived certain requirements relating to notice and approval of Administrative Plan and ACOP amendments, which will allow PHAs to adopt these new waivers more quickly. This alert focuses on the waivers applicable to the public housing and HCV/Section 8 programs. The full guidance can be found in Notice PIH-2020-13.

The period of applicability for each waiver is listed below; most have been extended through December 31, 2020. HUD may further extend these periods of applicability, if it determines it necessary.

HQS waivers

  • PHAs can enter into a Housing Assistance Payment (HAP) contract for tenant-based or PBV units, turn over units to a new family, add new units to a PBV HAP contract, or substitute units on a PBV HAP contract without conducting a Housing Quality Standards (HQS) inspection through December 31, 2020.
  • In lieu of the HQS inspection, the PHA may accept a certification from the project owner that the owner “has no reasonable basis to have knowledge that life threatening conditions exist” in the units in question.
  • Units must be inspected within one year of the certification.
  • These same alternate requirements apply to PHAs choosing to utilize the alternative inspection flexibility that had previously been provided under the Housing Opportunity Through Modernization Act of 2016 (HOTMA), which allows the PHA to recognize alternative inspection regimes such as REAC. In lieu of a PHA inspection within 15 days, the PHA may accept an owner’s certification of no knowledge of life threatening conditions, and then the unit would have to be inspected within one year of the certification.
  • If an HQS inspection has been conducted but the PHA utilizes the Non-Life Threatening Deficiencies (NLT) flexibility that had previously been provided under HOTMA, project owners can have up to 60 days, instead of 30, to make NLT repairs; this authority runs through December 31, 2020.
  • For units already under a HAP contract, PHAs may delay the required biennial HQS inspections until no later than one year from the date the biennial inspection would have been required absent the waiver.
  • If a tenant notifies a PHA that their unit does not comply with HQS, through December 31, the PHA may notify the project owner in lieu of conducting an HQS inspection. For life threatening deficiencies, the owner must either correct the deficiency or provide evidence that the deficiency does not exist within 24 hours. For non-life threatening deficiencies, the project owner must either correct the deficiency or provide evidence that the deficiency does not exist within 30 days of the PHA notification.
  • HUD is waiving the HQS requirement that a leased unit have at least one bedroom or sleeping room for every two people in order to accommodate residents who may need to add household members as a result of the COVID-19 emergency.

Re-certifications for income and family composition (public housing and HCV/Section 8)

  • PHAs can delay annual re-examinations of family income and composition until December 31, 2020.
  • If the PHA wishes to proceed with re-certifications, through December 31, 2020, PHAs can rely on family self-certification and forego reliance on third-party income verification, such as the Enterprise Income Verification System (EIV). HUD is even allowing this self-certification to occur over the phone if the PHA staff creates a contemporary written record.
  • Interim certifications can be used to adjust a family’s tenant portion of rent if they have lost income. Again, PHAs may rely on family self-certifications and need not rely on EIV or other third-party verification through December 31, 2020. Further, PHAs may wish to review and adjust their interim re-examination policies, such as when increases in family income must be reported or how to determine the effective date of the interim certification.
  • Mandatory EIV monitoring is waived through December 31, 2020. However, families will be responsible if significant discrepancies from their self-certification are later discovered.
  • Additionally, if a PHA’s payment standard increases, PHAs need not wait until the regular family re-examination for a unit to increase the HAP subsidy.

Additional waivers applicable to PIH and HCV/Section 8 programs

  • Section 8 Administrative Plans and public housing Admissions and Continued Occupancy Policies (ACOPs) may be temporarily amended without board of directors’ approval until September 30, 2020; the PHA must formally adopt any such changes by December 31, 2020.
  • PHA Annual Plan/5-Year Plan submission dates extended—PHAs with June 30 and September 30 fiscal year ends now have until October 18, 2020, to submit their annual or five-year plans. PHAs with December 31 fiscal year ends have until January 16, 2021. In addition, plan amendments, except for amendments required for RAD, Section 18, and Section 22 repositioning efforts, can be adopted without an open public meeting of the PHA’s board of directors.
  • HUD is still requiring PHAs to notify tenants of policy changes, but 30-day advanced notice is no longer required.
  • PHAs have been given broad latitude to extend a family’s initial voucher, execute HAP contracts up to 120 days after the start of a family’s lease, allow vacancies for more than 180 days, and retain units on a HAP contract even if the unit does not generate subsidy for more than 180 days.
  • COVID-19 qualifies as “good cause,” through December 31, 2020, to extend a family’s participation in the Family Self-Sufficiency (FSS) program for up to two years.
  • Raises the age of eligibility from 24 to 25 in the Family Unification Program (FUP); extends the length of assistance for a year for youths who were approaching the 36-month cut-off for assistance under FUP; and extends the length of time that a youth has to find a unit under FUP from 90 to 120 days.
  • Extends the period of eligibility for Section 8 homeownership assistance by one year for families approaching their maximum term of assistance prior to December 31, 2020.
  • Public notice for PHAs opening or closing waitlists can be provided by leaving an outgoing voice message on its answering system and website, if the messages are accessible for hearing, visual, and other communication-related disabilities.
  • Suspends the requirement, through December 31, 2020, that PHAs that own or operate public housing make an annual inspection of each public housing project to determine whether units in the project are maintained to applicable standards and remain safe for residents.
  • Capital Fund obligation end dates and expenditure end dates are extended by one year. PHAs may exceed Total Development Cost (TDC) and Housing Construction Cost (HCC) limits by 25%, and may seek HUD approval to exceed TDC and HCC by up to 50%. Deadlines for closeout forms are extended by six months.
  • PHAs may use force account labor (workers employed directly by the agency), rather than contracted labor, for modernization activities.
  • Energy audits are suspended and PHAs need not review utility allowances until December 31, 2020.
  • HUD is temporarily suspending the Public Housing Assessment System (PHAS) and the Section Eight Management Assessment Program (SEMAP) for PHAs with a fiscal year end on or before December 31, 2020; HUD will begin issuing new PHAS and SEMAP scores for PHAs with fiscal year end dates of March 31, 2021.
  • Financial statement submission deadlines have been extended by six months.
  • Through December 31, 2020, PHAs have 90, rather than 60, days to submit form HUD-50058 for transactions impacted by these waivers. HUD will provide future guidance regarding reporting work-arounds in the PIH Information Center (PIC) system.

The CARES Act also provides supplemental funding for the Public Housing and HCV programs and additional flexibility to move monies between Operating and Capital Funds. HUD published additional guidance regarding these aspects of the CARES Act in Notices PIH 2020-07 and 2020-08.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

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