HUD Handbook 7465.1 § 3-2

a.   POLICY

            (1)   PHAs must only admit applicants which have income
                  at or below the lower income limits. (There is a
                  diagram in Appendix 1.)

            (2)   PHAs must use the lower income limits in admitting
                  applicants to projects that reached DOFA (Date of
                  Full Availability) before October 1, 1981 ("old
                  projects").

            (3)   PHAs must use the very low income limits in
                  admitting applicants to projects that reached DOFA
                  on or after October 1, 1981 ("new projects")
                  unless HUD has approved an exception.

            (4)   There is no restriction on the number of lower
                  income families which are not very low income that
                  a PHA can admit to its "old projects".

            (5)   The income limit restrictions apply only at
                  admission. Federal law does not require income
                  limits for continued occupancy.

            (6)   A family may not be admitted to a public housing
                  program from another assisted housing program
                  (e.g., Section 8 Existing) or from a public housing
                  program operated by another PHA without meeting the
                  income limit restrictions applicable to the PHA.

            (7)   If a project is acquired for public housing
                  through acquisition, tenants already living there
                  must meet the income limit requirements.

            (8)   The income limit restrictions do not apply to a
                  family which needs or wants to transfer to another
                  dwelling unit within the public housing program at
                  a particular PHA.

            (9)   The income limit restrictions do not apply to
                  someone already in the program who has to enter
                  into a new lease.

    b.      DISCUSSION

(1)   An applicant must have income at or below the
                  lower income limits in order to be put on the
                  waiting list and in order to be admitted to public
                  housing. If the PHA has only "new projects," an
                  applicant must have income at or below the very
                  low-income limits in order to be put on the
                  waiting list and in order to be admitted to public
                  housing unless HUD has approved an exception.

                  (a)   A family may not be put on the waiting list
                        with income above the applicable income limit
                        with the expectation that the applicant's
                        income would be below the applicable income
                        limit by the time of admission.

                  (b)   If a family's income is at or below the
                        income limit the applicant is put on the
                        waiting list but goes above the income limit
                        before admission, the family may not be
                        admitted.

            (2)   While there is a maximum amount of income an
                  applicant may be eligible, there is no minimum
                  amount.

            (3)   A lower income family which is not very low income
                  may qualify of the PHA's projects (an "old
                  project") but not for (a "new project"). The
                  family may be put on the list and may remain on
                  the waiting list as long as the any project for
                  which the family would qualify.

            (4)   For projects which have reached DOFA in stages,
                  and therefore have more than one DOFA, the
                  earliest DOFA is used for determining whether the
                  entire project is an "old project" or a "new
                  project".

            (5)   A project that reached DOFA before October 1, 1981
                  which is put under a new ACC on or after October
                  1, 1981 because it is undergoing extensive
                  modernization is still considered an "old
                  project."

            (6)   HUD regulations provide that not more than 25% of

                  the dwelling units that become available in "old
                  projects" may be leased to lower income families
                  which are not very low-income families. The 25%
                  applies nationwide, not to a particular PHA or
                  project. Since it is highly unlikely that the 25%
                  figure will be reached nationwide, HUD has
                  implemented these provisions for all "old
                  projects" by placing no restrictions on the number
                  of lower income families which are not very low
                  income.

(7)   HUD regulations provide that not more than 5% of
                  the dwelling units that become available in "new
                  projects" may be leased to lower income families
                  which are not very low income families. The 5%
                  applies nationwide, not to a particular PHA or
                  project. HUD has implemented these provisions for
                  all "new projects" by not permitting the admission
                  of any lower income families to "new projects"
                  unless HUD has approved an exception. The 5%
                  authority is used for approving the exceptions.

            (8)   An exception is needed in order for a PHA to admit
                  any lower income family which is not very low
                  income to a "new project". Some reasons for
                  getting an exception include, but are not limited
                  to:

                  (a)   Need for more applicants to deal with vacancy
                        problems;

                  (b)   Local commitment to attaining occupancy by
                        families with a broad range of incomes;

                  (c)   Need for higher income families for a
                        homeownership project; and

                  (d)   Need to avoid displacing lower income
                        families from a project acquired by the PHA.

       c.   PHA PROCEDURES - Exceptions

            PHAs must send a request for an exception to the local
            HUD office. The PHA must indicate the reason for the
            request (e.g., to deal with a vacancy problem), the
            project involved, and the number of admissions sought
            under the exception. The PHA should also provide any
            other information which will help HUD in evaluating the
            situation.

       d.   HUD RESPONSIBILITIES - Exceptions

            The local HUD office will review the exception request
            and forward it, along with its recommendation, through
            the HUD Regional Office to Headquarters.

            The local HUD office will advise the PHA whether
            Headquarters approves or turns down the request. If it
            has been approved, the local HUD office will indicate
            the project involved, the number of families that can
            be admitted under the exception, and any restrictions
            that may apply. The local HUD office will also ask the
            PHA to keep a record of its use of the exception
            authority.

e.      REFERENCES

            U.S. Housing Act of 1937, Section 16

            24 CFR 913.103, 913.104, 913.105