HUD guidance makes $5,000,000 in voucher assistance available to owners in low-vacancy areas



May 27, 2014

Affordable Housing Alert

Author(s): Susanna Mitchell

Under recently issued HUD guidance, owners of certain at-risk households in low-vacancy areas may be eligible to receive tenant protection voucher assistance. Read on to see if your property meets the requirements to receive this assistance.

HUD has issued guidance making $5,000,000 in tenant protection voucher assistance available for certain at-risk households in low-vacancy areas. Notice HUD 2014-13 provides instructions, eligibility and selection criteria for $5,000,000 of the $130,000,000 appropriated for tenant protection actions in the Consolidated Appropriations Act, 2014 (PL 113-76). HUD will accept requests for assistance on a rolling basis until the funding is exhausted.

Under the Notice, three categories of properties in low-vacancy areas are eligible for either enhanced vouchers or project-based voucher (PBV) assistance. Owners in compliance with civil rights threshold requirements may request assistance for unassisted at-risk households residing at the property if the property has experienced or will experience one of the following three categories of events in FY 2014 (October 1, 2013 to September 30, 2014):

  • Category 1: Maturity of a HUD-insured, HUD-held or Section 202 loan that requires prepayment approval. This category only includes Section 202 Direct Loans and matured Section 236 and 221(d)(3)-(d)(5) Below Market Interest Rate (BMIR) primary mortgages.
  • Category 2: Expiration of a rental assistance contract for which tenants are not eligible for enhanced vouchers or tenant protection assistance under current law. This category only includes Rental Assistance Payments (RAP) contracts that expired prior to FY 2012 and Rent Supplement contracts that expired prior to FY 2000. Later expirations under these programs were already eligible for enhanced vouchers or tenant protection assistance under current law.
  • Category 3: Expiration of affordability restrictions accompanying a mortgage or preservation program administered by the secretary. This category includes matured Section 236, Section 221(d)(3)-(d)(5), or Section 202 Direct Loan mortgages where secretary permission is not required to prepay as long as the affordability restrictions expired with the maturity of the mortgage. It also includes properties with expired “stand alone” affordability restrictions.

Owners may submit requests to the HUD Multifamily Hub/Program Center Director for either enhanced vouchers or PBV assistance, which will be administered by a Public Housing Agency (PHA). Owners that request PBV assistance should be aware that in some circumstances PHAs may still provide enhanced vouchers in order to comply with the statutory and regulatory requirements of the voucher assistance program.

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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