HUD Handbook 7465.1 § 5-4

a.      POLICY - General

            (1)   PHAs may (but are not required to) adopt selection
                  preferences related to local program objectives.

            (2)   PHAs may not adopt selection preferences which
                  will prevent the PHA from attaining a broad range
                  of income in each of its projects.

            (3)   PHAs may not have a selection preference based on
                  the source of the family's income (e.g., for
                  working families before families on welfare).

            (4)   Unless specifically required in a HUD-approved
                  compliance agreement or a court order, a PHA may
                  not use selection preferences based on an
                  applicant's race, color, religion, sex, or
                  national origin. In particular, with respect to
                  preferences based on an applicant's sex, PHAs may
                  not give a preference to households headed by
                  males over households headed by females.

            (5)   If the PHA gives a selection preference to
                  applicants who are displaced, an applicant may not
                  qualify for that preference if the displacement
                  was due to the applicant having refused to accept
                  a transfer to another dwelling unit in accordance
                  with a court decree or a HUD-approved
                  desegregation plan.

            (6)   A PHA may not open its waiting list only to
                  applicants who would qualify for a particular
                  selection preference. A PHA may not close its
                  waiting list only to applicants who would not
                  qualify for a particular selection preference.

    b.      POLICY - Residency

            (1)   PHAs may give a preference to applicants who live
                  or work or have been notified that they are hired
                  to work in the PHA's jurisdiction.

            (2)   PHAs may have a requirement that applicants live
                  or work or have been notified that they are hired
                  to work in the PHA's jurisdiction.

            (3)   Any residency preference or requirement must apply
                  jurisdiction-wide. It may not apply only within a
                  particular subjurisdiction. (See also paragraph 5-6.

                 Organizing the Waiting List).

(a)   Residency preferences or requirements may not
                       be based on where an applicant lives or works
                       within the PHA's jurisdiction.

                 (b)   Residency preferences or requirements may not
                       be based on where the housing an applicant
                       may be offered is located within the PHA's
                       jurisdiction or the identity of such housing.

                 (c)   A PHA way not have a residency preference or
                       requirement for some projects but no
                       residency preference or requirement for
                       others.

                 (d)   A PHA may not have a residency preference for
                       some projects and a residency requirement for
                       others.

           (4)   Residency preferences or requirements may not be
                 based on how long the applicant has lived or
                 worked in the jurisdiction.

           (5)   A PHA may not limit what "working in the
                 jurisdiction" means to apply only to permanent,
                 full-time employees.

           (6)   A PHA with a residency preference may not keep a
                 unit vacant while awaiting a resident if there is
                 a suitable non-resident on the waiting list.

           (7)   HUD has the option of prohibiting PHAs from using
                 a residency preference or requirement in any case
                 where HUD determines that it would be inconsistent
                 with the Department's responsibility to further
                 fair housing.

c.     DISCUSSION - General

           (1)   In filling a particular vacancy, tenant selection
                 preferences allow a PHA to meet local objectives
                 in choosing among applicants who need the same
                 size and type of unit in the same type of project
                 (e.g., to choose among those applicants needing a
                 two-bedroom unit specially designed for the
                 handicapped in a general occupancy project).

           (2)   The size and type of unit and type of project
                 needed are always more important considerations
                 than the selection preferences a PHA may have. If
                 there is only one applicant who needs a particular

                  size and type of unit in a particular type of
                  project, selection preferences would not play a
                  role in deciding who is offered the unit.

(3)   Any tenant selection preference serves to override
                  date and time of application as a factor in
                  admission. The more tenant selection preferences
                  a PHA has, the less effect date and time of
                  application has in determining who is offered the
                  available unit. However, date and time would be
                  the final determination if there were two
                  applicants, each needing the same size and type of
                  unit in the same type of project and each having
                  the same tenant selection preferences or
                  preferences of equal weight.

            (4)   In addition to a preference based on income range-
                  (discussed in paragraph 5-3), some selection
                  preferences which PHAs may adopt include, but are
                  not limited to, preferences for applicants who
                  are:

                  (a)   without housing or have a similar emergency
                        need;

                  (b)   involuntarily displaced;

                  (c)   living in substandard housing;

                  (d)   paying a large portion of their income for
                        rent;

                  (e)   active-duty military or veterans;

                  (f)   families of active-duty military or veterans;
                        or

                  (g)   residents of the PHA's jurisdiction.

            (5)   PHAs may give a preference to families with
                  children for general occupancy projects as long as
                  elderly families with children are given the same
                  preference as nonelderly families with children.

            (6)   PHAs may give a preference based on a certain
                  period of time (e.g., 2 years) on the waiting
                  list. This can help make date and time of
                  application a more important consideration in the
                  tenant selection process if the PHA has several
                  selection preferences.

            (7)   A PHA may establish a policy that an applicant who
                  goes to the bottom of the waiting list due to
                  refusing the offer or offers a PHA has made loses
                  the benefit of all the PHA's tenant selection
                  preferences for a specific period of time.

d.   DISCUSSION - RESIDENCY

            (1)   Even without a residency preference or requirement
                  a PHA will usually get the vast majority of its
                  applicants from people who live or work within its
                  jurisdiction. Therefore, a residency preference
                  or requirement may have little practical effect.

            (2)   A residency preference has an advantage over a
                  residency requirement in permitting a PHA to get
                  additional applicants from areas outside the PHA's
                  jurisdiction while still giving a higher
                  consideration to applicants who live or work
                  within the PHA's jurisdiction.

            (3)   A residency requirement may be appropriate if a
                  PHA has such a large number and variety of
                  applicants that it cannot hope to serve even those
                  who live or work within its jurisdiction and the
                  PHA wants to avoid the time and expense of
                  processing unnecessary applications.

            (4)   A residency requirement is not appropriate if a
                  PHA is having difficulty filling vacancies. A
                  residency preference may not be appropriate if a
                  PHA is having difficulty filling vacancies and the
                  residency preference is discouraging people from
                  outside the PHA's jurisdiction from applying.

            (5)   A residency preference or requirement allows a PHA
                  to serve first those in need who live in the PHA's
                  jurisdiction. Such a provision may also restrict
                  the opportunities of those who want to live in the
                  PHA's housing but who are not residents. When the
                  PHA determines that it restricts the housing
                  opportunities of a particular racial or ethnic
                  group, the PHA should amend its policies and
                  discontinue using such a preference or
                  requirement.

   e.       REFERENCES

            24 CFR 960.203, 960.204

            Federal civil rights laws listed in paragraph 1-3(c).